NYDFS will simplify getting BitLicense for cryptocurrency firms

The New York State Department of Financial Services (NYDFS) will make it easier for cryptocurrency firms to obtain a BitLicense and listnew coins on the trading floors.

In accordance with the proposal of the New York Department of Financial Services, according to which NYDFS accepts comments until August 10, the process of obtaining a license for cryptocurrency companies will be simplified.

Cryptocurrencies currently working in New YorkCompanies, including cryptocurrency exchanges, should receive BitLicense, which allows state-owned firms to receive, store, issue or transfer cryptocurrencies. Only 25 firms were able to get BitLicense. The last NYDFS-approved company was ErisX's subsidiary.

Now, NYDFS is proposing to introduce a “conditional” license, under which cryptocurrency companies could work with companies that already have a valid BitLicense.

"The NYDFS expects that an entity that obtains a conditional license will attempt to obtain a full BitLicense," notesregulator.

To obtain a conditional license cryptocurrencycompanies must declare their intention to work with the owner of BitLicense and provide an appropriate contract. Then they need to submit documents to NYDFS for verification. If the application is approved, the regulator will monitor the activities of the company and prepare a list of conditions that the company must comply with. In the event of a breach of the terms, NYDFS “may revoke the conditional license at any time.”

NYDFS awaits community comments onsuggestions, for example, about what types of companies can receive such a license, what should be the scope of the license, what should NYDFS pay attention to, and so on.

In addition, NYDFS offered a new guide,which allows cryptocurrency companies to "independently certify" listings of new coins. The nuance is that companies must get NYDFS approval for self-certification and be prepared for the regulator's close attention. In addition, cryptocurrency companies will not be able to independently certify the listing of confidential coins and tokens for online casino bets.

NYDFS planned to simplify last fallthe procedure for issuing BitLicense to cryptocurrency companies due to the fact that the license has ceased to be in demand among startups. However, in January, New York State Governor Andrew Cuomo demanded stricter regulation of cryptocurrency companies and the expansion of NYDFS.

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