When can you skip the BitLicense?
Before diving in, make sure you actually need a license (it’s not free). You’re exempt if you’re:
A charitable organization that solely accepts donations in virtual currency.
An individual or business that solely mines virtual currency and sells mined coins in private, non-commercial transactions.
An individual or company that solely develops and disseminates software (as a purely technical service) for the virtual currency space.
If you fall into one of the above categories, stop here. Otherwise, read on.
Who needs a BitLicense?
You need a BitLicense if you are conducting one of the following five activities “involving New York or New Yorkers” (emphasis added):
1. receiving Virtual Currency for transmission or transmitting Virtual Currency;
2. storing, holding, or maintaining custody or control of Virtual Currency on behalf of others;
3. buying and selling Virtual Currency as a customer business;
4. performing exchange services as a customer business; or
5. controlling, administering, or issuing a Virtual Currency.
To simplify, if you are a business, individual, or charitable organization that sends, receives, stores, holds, buys, sells, exchanges, controls, administers, OR issues virtual currency on behalf of others (with even one of those “others” involving a New Yorker or New York), you’ll need a BitLicense. Yes, your business can be located outside New York and still need one. Additionally, if you engage in the transmission of fiat currency as part of your business, you will also need a Money Transmission License.