What is "bitlicense"

A BitLicense is the common term used for a business license of virtual currency activities, issued by the New York State Department of Financial Services (NYSDFS) under regulations designed for companies. The regulations are limited to activities involving New York or a New York resident. Those that reside, are located, have a place of business, or are conducting business in the State of New York count as New York Residents under these regulations.

The regulations define virtual currency business activity as any one of the following types of activities:

• receiving Virtual Currency for Transmission or Transmitting Virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of Virtual Currency,
• storing, holding, or maintaining custody or control of Virtual Currency on behalf of others,
• buying and selling Virtual Currency as a customer business,
• performing Exchange Services as a customer business, or
• controlling, administering, or issuing a Virtual Currency.

But, the 2 following activities are excluded from the definition of virtual currency business activity:

• development and dissemination of software in and of itself,
• merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or services or for investment purposes.

It came into effect on August 8, 2015. Several bitcoin companies announced they were stopping all business in New York State because of the new regulations. The New York Business Journal called this the "Great Bitcoin Exodus".

In September 2015 the first BitLicense was issued to Circle Internet Financial.

In October 2015, an article 78 was filed in the Supreme Court of the State of New York challenging the authority of the New York State Department of Financial Services to define Virtual Currency.