Benjamin Lawsky, Superintendent for the New York Department of Financial Services (NYDFS), has published a 46-page document of the revised “BitLicense” regulations.
The latest rules account for the over 3,700 comments submitted by the public on the initial proposal. Much of the Bitcoin community, and even non-Bitcoin related businesses, had expressed various concerns over the original proposal.
In the final version, several clauses and definitions are added that should settle most of these concerns. The main rule is that no person can engage in “Virtual Currency Business Activity” without a license. In Section 200.2, such activity is defined as follows:
“(q) Virtual Currency Business Activity means the conduct of any one of the following types of activities involving New York or a New York Resident:
(1) 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;
(2) storing, holding, or maintaining custody or control of Virtual Currency on behalf of others;
(3) buying and selling Virtual Currency as a customer business;
(4) performing Exchange Services as a customer business; or
(5) controlling, administering, or issuing a Virtual Currency.
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The development and dissemination of software in and of itself does not constitute Virtual Currency Business Activity.”
In addition, persons chartered under the New York Banking Law are exempt.
The digital value represented by gift cards and rewards programs does not constitute virtual currency, according to the definitions section.
There is an application fee of $5,000, non-refundable.
For virtual currency businesses already operating, they will have a transitional period of 45 days from the date the new regulation goes into effect to apply for a license. They would then be deemed to be in compliance until if their application is denied, at which point they must cease all business activity immediately.