BitLicense Frequently Asked Questions
Who is required to obtain a BitLicense?
Subject to certain exceptions, anyone engaging in any of the following activities is required to obtain a BitLicense:
- Virtual currency transmission
- 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
- Controlling, administering, or issuing a virtual currency.
Does a consumer need a BitLicense in order to purchase goods or services with virtual currency?
No. A consumer does not need a BitLicense in order to purchase goods or services with virtual currency.
Does a merchant need a BitLicense in order to accept virtual currency as payment for goods or services?
No. A merchant does not need a BitLicense in order to accept virtual currency as payment for goods or services.
Do I need a BitLicense simply to develop software?
No. The development of software in and of itself does not require a BitLicense.
Is a BitLicense required in order to engage in “non-financial” uses of virtual currency?
Where a transaction is undertaken for non-financial purposes and does not involve more than a nominal amount of virtual currency, a BitLicense is not required.
If an entity is chartered under the New York Banking Law, does it need a BitLicense in order to engage in virtual currency business activity?
An entity chartered under the New York Banking Law must receive the prior approval of the Department to engage in virtual currency business activity. However, such a chartered entity is not required to apply for a BitLicense.
If a company is already engaging in activity that requires a BitLicense, when does it have to apply for a BitLicense?
Companies that are already engaging in activity that requires a BitLicense must apply within 45 days of the effective date of the regulation. The effective date is June 24, 2015 and, thus, potential applicants must apply by August 10, 2015.
Is an out-of-state business required to obtain a BitLicense to engage in virtual currency business activity in New York State or with New York State residents?
Yes. A business must obtain a BitLicense if it engages in virtual currency business activity involving New York State or persons that reside, are located, have a place of business, or are conducting business in New York.
Is it possible for my small start-up company to receive a BitLicense even if it does not initially meet all the BitLicense regulatory requirements?
After a comprehensive evaluation of, among other things, an applicant’s business model and the risks it presents, the Department may, at its discretion, issue a two-year conditional BitLicense. Licensees with conditional BitLicenses may be subject to heightened review.
If my company needs a BitLicense, does it also need a money transmitter license?
Depending on the specific business activities in which they are engaged some companies may need both a money transmitter license and a BitLicense.
If I am applying for both a BitLicense and a money transmitter license, do I need to submit everything twice?
No, you can cross-satisfy many application requirements in order to avoid unnecessary duplication.
If I file Suspicious Activity Reports (SARs) with FinCEN, do I also have to file them with the Department?
No. BitLicensees that are already subject to SAR filing requirements under federal law are not required to file separately with the Department. However, when a Licensee is involved in a Virtual Currency to Virtual Currency transaction or series of Virtual Currency to Virtual Currency transactions in an aggregate amount exceeding $10,000 in one day, by one Person, the Licensee shall notify the Department. We will be providing a portal through which Licensees may submit such reports.
Are BitLicensees required to seek prior Department approval for minor software or app updates?
No. Prior Department approval is required only if the BitLicensee proposes to introduce a materially new product, service, or activity, or to make a material change to an existing product, service, or activity.