The use of cryptocurrencies, such as Bitcoin, has become more popular since the first introduction of Bitcoin in 2008. At the time, cryptocurrencies were so new that it was difficult to foresee how big of an impact they would have, and therefore, there was no initial need for or thought of regulation. Today, however, the need for regulation is much more apparent—without such regulations, tax evasion and other financial crimes are easier to commit and cryptocurrencies may be more attractive to criminals.
In order to regulate cryptocurrencies and reduce the rate of financial crimes, the state of New York has created the BitLicense. Consider the following information about the BitLicense, and call our cryptocurrency consultants at Bates Group, LLC with additional questions.
What Is a BitLicense?
A BitLicense is a type of financial business license that is issued to businesses that engage in activities that utilize virtual currencies. It is issued by the state of New York Department of Financial Services (NYDFS) and is designed to provide regulatory oversight and functions for the transmission of cryptocurrencies and digital asset management.
Who Needs a BitLicense?
A business may need a BitLicense if it engages in any virtual currency business activities. Virtual currency business activity includes:
- Receiving virtual currency for transmission or transmitting 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 virtual currency exchange services as a customer business
- Controlling, administering, or issuing a virtual currency
What’s the BitLicense Application Process?
In order to file an application for a BitLicense and receive one, a business must meet a multitude of requirements, including but not limited to:
- Maintaining a minimum net worth of $500K
- A qualified CCO with a minimum of 3 years of experience in the industry
- An MSB bank account for holding customer funds
- Third-party security audit
- Detailed Policies & Procedures
- Full transparency of the applicants ownership structure
- Officer & owner personal financials
- Maintaining a security bond or trust
- Fingerprints, credit reports, and background checks
The application can be commenced and filed online. There are filing fees for the application—the initial fee is $5,000. However, note that other costs associated with getting and maintaining a license, such as legal fees, can total far more.
Call Bates Group, LLC Today for Help with Your New York BitLicense
If your business uses virtual currency, then it is required under the law to acquire and maintain a BitLicense through New York’s Department of Financial Services. For help filing for a BitLicense, maintaining your BitLicense, or meeting BitLicense compliance criteria, call Bates Group, LLC directly today. Our experienced consultants will provide personalized services to your business and have a reputation for excellence. Reach us now online or by phone to get started.