New York Announces Final BitLicense Regulations for Virtual Currency Businesses

June 3, 2015

On June 3, 2015, Superintendent Benjamin M. Lawsky of the New York Department of Financial Services (“DFS”) announced the final “BitLicense regulatory framework” (the “Final BitLicense Framework”) for certain virtual currency businesses in New York. The Final BitLicense Framework represents the first comprehensive state regulatory proposal to address virtual currency businesses. The Final BitLicense Framework includes significant changes from the original July 2014 proposal, but is essentially unchanged from the February 4, 2015 revised proposal.

The adoption of the Final BitLicense Framework is the second major announcement by Superintendent Lawsky on virtual currencies within the past month. On May 6, 2015, DFS granted a trust company charter to itBit Trust Company, LLC (“itBit”)—the first chartered and prudentially regulated virtual currency exchange in the United States. On May 7, 2015, itBit opened for business in New York City and began accepting U.S. customers. Cleary Gottlieb served as counsel to itBit throughout the application process and continues to serve as counsel on continuing developments.