A business license permitting regulated virtual currency activities, issued by the New York State Department of Financial Services.
Coming into effect in August 2015, the BitLicense was the first regulatory regime targeted at cryptocurrency businesses in the U.S.
A BitLicense is required by any resident of New York carrying out regulated cryptocurrency activities, or any non-resident person or other entity that is engaged in those activities with people who do live in New York. Crucially, though, individuals who are making or receiving crypto payments are exempt.BitLicense was extremely controversial upon launch, and remains the subject of widespread ire within the crypto community.
Many crypto businesses insist that the regime places unfairly onerous restrictions and obligations on them — and that the cost of applying for the BitLicense (estimated to run to at least $100,000) is punitive.
When the regulations came into force in 2015, at least 10 crypto-related businesses announced that they would cease all trading activities in New York as a result. Indeed, only a handful of companies have successfully received BitLicenses since its launch.Regardless of industry reception, the BitLicense is a key part of a more general effort on the part of global lawmakers to regulate crypto — a sector that is resistant to state interference by nature.
However, as recent events show — such as the backlash that Facebook’s Libra project received from central banks — tighter oversight of cryptocurrencies and decentralized technology more generally seems inevitable.
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