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

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.

New York's proposed virtual currency regulations

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Taylor Nicole Launches New Site Through YourPaysitePartner

Creator Taylor Nicole has launched her new official website through YourPaysitePartner (YPP).

Adult Networking Platform SpicyGigs.com Launches

SpicyGigs, a new adult industry networking platform, has officially launched.

Pineapple Support to Host 'Cream Pie Challenge' Fundraiser

Pineapple Support is hosting its Cream Pie Challenge through August to raise funds for mental health services for industry performers.

Kyrgyzstan President Signs Measure Outlawing Internet Porn

President Sadyr Japarov of Kyrgyzstan on Tuesday signed into law legislation outlawing online adult content in the country.

NC Legislature Overrides Veto of Extreme Anti-Adult Industry Bill

The North Carolina state legislature on Tuesday voted to override Gov. Josh Stein’s veto of a bill imposing regulations that industry observers have warned could push adult websites and platforms to ban most creators and content.

Report: VPN Downloads Soar in UK Following Age Verification Deadline

Virtual private network apps, which can be used to circumvent geo-specific age verification requirements, are topping Apple App Store downloads in the U.K. in the wake of new Online Safety Act rules, the BBC is reporting.

Strike 3 Holdings Sues Meta for Pirating Vixen Media Group Content to Train AI

Vixen Media Group owner Strike 3 Holdings filed suit in federal court this week, accusing Facebook parent company Meta of copyright infringement and alleging that Meta has extensively pirated VMG content to train its artificial intelligence models.

Pineapple Support, Streamate to Host 'Navigating Grief and Loss' Support Group

Pineapple Support and Streamate are hosting a free online support group to help performers cope with grief and loss.

Friday is Final AV Compliance Deadline in UK

Friday, July 25 marks U.K. media regulator Ofcom’s deadline for user-to-user services such as tube, cam and fan sites to implement its requisite “highly effective age assurance” measures for preventing minors from viewing adult content.

AEBN Publishes Popular Searches for May, June

AEBN has released the top search terms for the months of May and June from its straight and gay theaters in all 50 states and the District of Columbia.

Show More