Evolution of the NYDFS Virtual Currency Licensing Regime

In the Summer of 2015, the New York State Department of Financial Services (“DFS”) became the first state banking regulator to issue a stand-alone virtual currency regulatory framework (23 NYCRR Part 200). Prior to the creation of this virtual currency license, also known as the “Bitlicense,” institutions followed different paths to seek approval from the DFS for their crypto-related activities involving New York or New York residents. DFS is now implementing key changes to the cryptocurrency licensing regime following its review of the program.