BitLicense
A state license required for many virtual currency businesses that serve customers in New York.
A BitLicense is a regulatory license issued by the New York State Department of Financial Services for companies engaged in certain virtual currency activities involving New York or New York residents. It can apply to businesses such as crypto exchanges, wallet providers, custodians, and payment processors, depending on what services they offer. The rules generally focus on consumer protection, anti-money-laundering controls, cybersecurity, recordkeeping, compliance staffing, and financial safeguards.
It matters because New York is a major financial market, and serving customers there may require a company to obtain a BitLicense or operate under another approved structure, such as a limited purpose trust charter. For users, a BitLicense can signal that a provider has met specific state compliance requirements, though it does not remove all risks of using crypto services. For example, a crypto exchange that wants to let New York residents buy and sell bitcoin may need approval from the state, while the same exchange might operate in other states under different licensing rules.
Other terms in Regulation & Tax
AML
Anti-money laundering rules and processes aim to stop criminals from using financial systems, including crypto platforms, to hide or move illicit funds.
CARF
CARF is an OECD framework for tax reporting and automatic exchange of information about crypto-asset transactions.
Crypto Tax Loss Harvesting
A tax strategy where investors sell crypto at a loss to realize a capital loss that may offset taxable gains, subject to local rules.
FATF
The Financial Action Task Force is a global standard-setter for anti-money-laundering and counter-terrorist-financing rules.