A BitLicense is a generic term used for business license for virtual currency activities, issued by the New York State Department of Financial Services (NYSDFS) under regulations designed for companies. Regulations are limited to activities involving New Yorkers or New Yorkers. Those who live, are, own a place of business, or are doing business in New York state count as New Yorkers under this rule.
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The rules establish a virtual currency business activity as one of the following types of activities:
- accepts a virtual currency for Transmission or Transmission of a virtual Currency, unless the transaction is made for non-financial purposes and does not involve the transfer of more than the nominal amount of the virtual currency;
- save, store, or retain custody or control of the virtual currency on behalf of others;
- buy and sell virtual currency as a customer business;
- perform the Exchange Service as a customer business, or;
- control, manage, or issue a virtual currency.
However, the following two activities are exempt from the definition of a virtual currency business activity:
- development and deployment of software by itself;
- merchants and consumers who use virtual currency solely for the purchase or sale of goods or services or for investment purposes.
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History
On July 17, 2014, the department released details on the proposed "BitLicense", which puts the rules on any company or person using cryptocurrency located in New York. The proposed rule was officially published in the New York State List on July 23, beginning a 45-day comment period. On February 25, 2015, a revised proposal notice was issued, beginning another 30-day comment period.
It came into effect on August 8, 2015. At least ten bitcoin companies announced they stopped all business in New York State because of the new regulations. The New York Business Journal calls this "Great Bitcoin Exodus".
In September 2015, the Boston-based Circle awarded the first BitLicense, although in December 2016 the company has turned away from bitcoin exchanges to focus more on payments.
In October 2015, an article 78 filed in the Supreme Court of the State of New York challenged the authority of the New York State Department of Financial Services to define the virtual currency. Judge St. George hears the case on October 10, 2017 and cancels the case on December 27, 2017. The case is currently under appeal.
In July 2016, the San Francisco-based Ripple was awarded the second BitLicense.
In January 2017, the San Francisco-based Coinbase, one of the most funded startups in the Bitcoin industry, was awarded the third BitLicense.
In November 2017, BitFlyer based in Tokyo 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 Currency in (Section 200 of Title 23 of) New York Code, Rules and Regulations
- BitLicense Frequently Asked Questions From NYSDFS
Source of the article : Wikipedia
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