BitLicense is a virtual currency business license issued by the New York State Department of Financial Services (NYSDFS). The license applies to activities within the state and to residents of New York. The final version of the license was released on August 8, 2015, after lengthy discussions.
The license defines the basic rules for regulating companies working with digital currencies: their management, administration, maintenance, storage, issuance, exchange operations, the development of appropriate software, etc.
BitLicense exists only for legal entities. On the one hand, the license provides the legal basis and protection without the need to prove the legality of their work to clients. On the other hand, these rules increase the time and costs for companies.
After the BitLicense was approved, some crypto firms, including Bitfinex, Poloniex, LakeBTC, ShapeShift, LocalBitcoins, Kraken and Korbit, decided to leave New York.
Now, only a dozen of companies have received BitLicense, such as Circle, Ripple, Coinbase, bitFlyer, Genesis Global Trading, Xapo, Square Inc., BitPay, Coinsource, Robinhood and LibertyX. Gemini Exchange and itBit obtained individual permissions for operations with cryptocurrency from NYDFS.