The recently finalized rules governing how virtual currency businesses operate in New York State have officially become law, effective today.
Also known as the BitLicense, the rules are filed under “Regulation of the Conduct of Virtual Currency Businesses” in a Notice of Adoption published today in the New York State Register.
The rules were formulated by the New York Department of Financial Services (NYDFS), led by outgoing superintendent Benjamin Lawsky. In the works for nearly two years, an initial draft was produced last summer, attracting over 3,700 comments. A revised draft, accounting for some of the feedback, appeared in February, and the final version earlier this month.
According to the notice, the latest changes are considered “nonsubstantive.”
The rules form a newly added section, Part 200, to Title 23, Department of Financial Services, in the New York Codes, Rules and Regulations (NYCRR).
The notice goes through a synopsis of comments received on the rules, and attempts to address concerns expressed in each. One of the biggest points of contention was the need for dedicated licensing. Many argued that “virtual currency should be regulated under existing money transmission law or not at all.” To this, the notice responds:
“The Department has extensively considered the need to regulate virtual currency business activity and the appropriate way to do so, and it has concluded that a new regulation under the Financial Services Law is necessary to protect New York consumers and users of virtual currency related services.”
Businesses dealing in virtual currency have a 45-day grace period, during which they can apply for license and still be deemed in compliance with licensure requirements while their application is considered. Those that have not applied will be deemed to be conducting unlicensed Virtual Currency Business Activity.