New York Money Transmitter Licensing & Virtual Currency Licensing (“BitLicense)

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New York Money Transmitter Licensing & Virtual Currency Licensing (“BitLicense)

In order for many financial and money-handling businesses to operate in a particular state, they must first obtain and maintain a state Money Transmitter License. This is certainly true in New York, as well as in 47 states and the District of Columbia. If you facilitate the movement of money between parties or companies, you need to ensure you properly apply for and receive a Money Transmitter License before you operate in any state that requires a license. For virtual currency businesses that want to operate in New York, they must first obtain the New York Virtual currency License or “BitLicense”. There is a possibility, depending on the company business model, that New York may require a virtual currency business to obtain both a Money Transmitter License and a BitLicense.

Obtaining a Money Transmitter License and/or a Virtual currency License (“BitLicense”) is not a simple undertaking in New York, and it can be a costly process if you are not familiar with the licensing process or any errors are made. Do not risk your operations and your company’s success – instead, contact Bates Group LLC, for assistance with the licensing process. Our company is ready to help, so reach out today. 

Who Needs a Money Transmitter License?

First, it is critical to recognize when your company needs to obtain a license to operate. A Money Transmitter License is required for companies conducting transactions involving $1,000 or more per customer or transaction in one day involving one or more of the following: 

  • Check cashing;
  • Money orders;
  • Currency exchange or dealing;
  • Traveler’s checks; or
  • Money transfer services

If your business involves or will involve one of the above, you will need a Money Transmitter License and should not hesitate to call our team for assistance.  

Who Needs a Virtual Currency License (“BitLicense”)?

A license is also required for companies engaging in any Virtual Currency Business Activity. New York defines Virtual Currency Business Activity as conducting any one of the following types of activities involving New York or a New York Resident:

  • 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.

Requirements for a Money Transmitter License & Virtual Currency License (“BitLicense”)

The requirements for a Money Transmitter License and Virtual Currency License (“BitLicense”) are very similar. The main difference between the two is that New York will review the BitLicense application a little more stringently. This is due to the fact that virtual currency businesses are relatively new, and some business models can be more difficult to understand than traditional money transmitter businesses. In order to obtain a Money Transmitter License and/or a Virtual Currency License (“BitLicense”) in New York, you must complete specific steps. First, access the application checklist(s) from the Nationwide Multistate Licensing System (NMLS) and fully and accurately complete all parts of the application. Applicants are required to submit significant documentation, including but not limited to:

  • Audited financial statements;
  • Any other trade names of your business;
  • A list of authorized agents who will conduct money transmissions;
  • FinCEN registration filing date and confirmation;
  • Bank information for accounts that will be used for money transmissions;
  • Information for banks that will extend credit to your business;
  • Detailed answers to all disclosure questions;
  • Your full anti-money laundering/Bank Secrecy Act (AML/BSA) policy;
  • A copy of your business plan;
  • Certificate of your company’s good standing in New York;
  • All procedures and policies for agency contracts;
  • Samples of all documents you will use for customer transactions;
  • A step-by-step description of your intended flow of funds;
  • All formation documents for the company;
  • Ownership information about the company;
  • Personal financial statements for company control persons;
  • Background checks, fingerprints, and credit reports for company control persons;
  • A management flow chart; and
  • Information about your Chief Compliance Officer (minimum 3 years’ experience)

These are only some examples of the documents and information you need to apply for a license.  You must also pay the application and license fee, which is $3,000 (plus additional fees) for a Money Transmitter License and $5,000 (plus additional fees) for a BitLicense. Both licenses require a minimum bond amount of $500,000 and must be from an authorized surety company.

Learn About Our New York Licensing Services

It is not hard to imagine how time-consuming the process of gathering all necessary information can be, and then, you might not even have everything that you need. We consult with businesses like yours and help you present a complete and accurate application(s) for both your New York Money Transmitter Licenses & Virtual Currency Licenses (“BitLicense”). For more information about Bates Group LLC, and our New York licensing services, contact us directly today. 

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