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New York Regulator Proposes Cryptocurrency Overhaul to Boost Adoption of Digital Assets

June 25, 2020

The New York Department of Financial Services (NYDFS), which regulates the state’s financial infrastructure, is proposing a plan that would ease the city’s notoriously tight restrictions on cryptocurrency-related businesses.

Under the agency’s current set of regulations, crypto firms that operate in New York are required to have a BitLicense to receive, store, issue or send digital assets. Trouble is, it can take years to obtain the license and to date, only 25 firms have been granted a BitLicense since New York introduced the policy in 2015.

To ease these licensing hurdles and promote growth in the industry, the NYDFS is now considering whether it should grant “conditional” licenses to crypto companies that would allow them to work with firms that already have the actual BitLicense.

The regulator is accepting public comments on the proposed conditional licensing framework until August 10th.

“The framework can be utilized by a variety of entities, such as startups, growth-stage companies, established New York companies not yet conducting any virtual currency business activity, and established virtual currency companies now operating outside New York…

DFS expects that an entity that seeks a Conditional License will endeavor to eventually seek and obtain a full BitLicense.”

The regulator is also introducing a new guidance that allows crypto companies to “self certify” the listing of new coins, provided they have the green light from the NYDFS to self-certify, and they steer away from privacy coins and tokens designed for use in the gambling industry.

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