A BitLicense is the common term used for a business license of virtual currency activities, issued by the New York State Department of Financial Services (NYSDFS) under regulations designed for companies. The regulations are limited to activities involving the state of New York or a New York resident. People residing in, located in, having a place of business in, or conducting business in the State of New York count as New York Residents under these regulations. The license was introduced and designed by Benjamin Lawsky, New York's first Superintendent of Financial Services, in July 2014.
Video BitLicense
Overview
The regulations define virtual currency business activity as any one of the following types of activities:
- receiving virtual currency for Transmission or Transmitting virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of virtual currency;
- storing, holding, or maintaining custody or control of virtual currency on behalf of others;
- buying and selling virtual currency as a customer business;
- performing Exchange Services as a customer business, or;
- controlling, administering, or issuing a virtual currency.
The two following activities are excluded from the definition of virtual currency business activity:
- development and dissemination of software in and of itself;
- merchants and consumers that utilize virtual currency solely for the purchase or sale of goods or services or for investment purposes.
Maps BitLicense
History
On July 17, 2014, the department released details on a proposed "BitLicense", which places regulations on any company or person that uses cryptocurrencies residing in New York. The proposed regulations were officially published in the New York State Register on July 23, beginning a 45-day comment period. On February 25, 2015, a revised proposal notice was published, beginning another 30-day comment period.
It came into effect on August 8, 2015. At least ten bitcoin companies announced they were stopping all business in New York State because of the new regulations. The New York Business Journal called this the "Great Bitcoin Exodus".
In September 2015, Boston-based Circle was granted the first BitLicense, although in December 2016 the company had pivoted away from its bitcoin exchange to focus more on payments.
In October 2015, an article 78 was filed in the Supreme Court of the State of New York challenging the authority of the New York State Department of Financial Services to define virtual currency. Justice St George heard the case on October 10, 2017 and dismissed the case on December 27, 2017 The case is currently on appeal.
In July 2016, San Francisco-based Ripple was awarded the second BitLicense.
In January 2017, San Francisco-based Coinbase, one of the most heavily funded startups in the Bitcoin industry, was awarded the third BitLicense.
In November 2017, Tokyo based bitFlyer was awarded the fourth BitLicense and Genesis Global Trading was awarded the fifth BitLicense in May 2018.
In June 2018, Hong Kong based Xapo was awarded the sixth BitLicense and Square Inc. was awarded the ninth BitLicense.
References
External links
- Virtual Currencies in (Part 200 of Title 23 of) the New York Codes, Rules and Regulations
- BitLicense Frequently Asked Questions From NYSDFS
Source of article : Wikipedia
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