BitLicense is a set of rules and regulations laid out, for the Bitcoin companies, by the New York Department of Financial Services (NYDFS) when they are serving the residents of New York. Those that reside, have their business location, or are conducting a business in the State of New York are bound by the regulations.
BitLicense is a framework for virtual currency and defines a business action as a virtual currency activity which includes
1. Receiving or transmitting of virtual currency for any financial purpose 2. Storing, maintaining, possessing of virtual currency as safe keeper for others 3. Buying and selling of virtual currency for monetary gains, 4. Controlling, issuing virtual currency and 5. Performing Exchange Services as a customer business.
However, it does not include developing and disseminating of software and those who use the virtual; currency to buy or sell goods and services.
BitLicense has come into force in August 2015. There were several protests and many companies filed cases in the Supreme court challenging the authority of DFS to issue and define the virtual currency regulations.
BitLicense is expensive. The companies should shell out a non-refundable application fee of $ 5000. This has compelled many of the Bitcoin vendors to cease their operations in New York.
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