Home > News > N.Y. Proposes 'Bit License' for Virtual Currencies • Bookmark   • Newsletters   • Register Search Options


N.Y. Proposes 'Bit License' for Virtual Currencies

N.Y. Proposes 'Bit License' for Virtual Currencies
Get XBIZ News
Jul 17, 2014 2:00 PM PDT    Text size: 

NEW YORK — New York state’s top financial regulator today introduced a "bit license" plan, the first proposal by a state to create guidelines specifically for virtual currencies.

Money laundering, cybersecurity and consumer protection are the primary reasons for such a license for virtual currency exchanges and for companies that secure, store or maintain custody or control of the funds on behalf of customers, according to Benjamin Lawsky, the state's superintendent of the Department of Financial Services.

Websites that accept virtual currencies for payment, including the dozens of adult websites that honor them, would not need to apply for a license. But those buying and selling virtual currency as a business would.

While some may view the proposed rules that only apply intrastate as restrictive, others, including Lawsky, see them as important step to legitimize virtual currencies as a durable currency.

"We recognize that not everyone in the virtual currency community will be pleased about the prospect of a new regulatory framework,” Lawsky said in a post on Reddit. "Ultimately, though, we believe that setting up common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the safety and soundness of customer assets."

Highlights of the proposal include:

  • Existing virtual currency exchanges have 45 days to register with the state and all new businesses requires written approval;
  • All employees will be required to submit to background checks;
  • All virtual currency businesses will be required to post a surety bond;
  • Businesses will need to submit quarterly financial statements within 45 days of the close of every quarter. They also will need to keep records of all business transactions for 10 years;
  • Any retained earnings and profits can only be invested in U.S dollar instruments such as federal and state bonds or money market funds;
  • Businesses must include in all marketing and advertising materials, “Licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services” and disclose material risks of dealing with virtual currency;
  • Businesses must comply with existing cybersecurity regulations, including employing a security officer and implementing a security plan;
  • Virtual currency businesses must follow existing anti-money laundering and "know your customer" requirements; and,
  • Contents of virtual currency accounts that are not used within five years must be handed over to the state.

Lawsky has created a public comment page on Reddit over the issue. It is available here.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Grand Slam Media CEO Luke Hazlewood Hits It Out of the Park

Grand Slam Media Inc. CEO Luke Hazlewood’s view of the advertising business is one that seems to have solid roots. He says that in an ever-changing marketplace it is a better protocol to lead rather... More »

2017 XBIZ Webstar of the Year Harriet Sugarcookie Dares to Evolve

Start with a heaping helping of charming personality, sprinkle a dash of delightful quirky antics, then lather the final product with a whopping dollop of sensual sweetness… and what do you get?... More »

2017 XBIZ Trans Performer of the Year Reigns Supreme

It’s easy to see Aubrey Kate now — the modelesque, blonde bombshell — and dismiss her recent awards in the erotic arts as inevitable. It’s easy to say that she was simply born with... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Access the latest issues of the industry's leading trade publications in digital form. View online or download for offline viewing.


XBIZ Retreat

May 30 - Jun 03
Miami, Florida

XBIZ Miami 2017

May 30 - Jun 02
Miami, Florida

XShow 18+ 2017

Jun 01 - Jun 03
Moscow, Russia

Cam Summit

Jun 02 - Jun 04
Lloret de Mar, Spain
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!