New York’s Department of Financial Services finalized its rules regarding the regulation of a person engaged in “any virtual currency business activity.”
Under these regulations, “virtual currency business activity” is defined to mean:
“the conduct of any one of the following types of activities involving New York or a New York Resident:
(1) 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;
(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.
The development and dissemination of software in and of itself does not constitute Virtual Currency Business Activity.”
There are two categories of exemption:
“(1) Persons that are chartered under the New York Banking Law and are approved by the superintendent to engage in Virtual Currency Business Activity; and
(2) merchants and consumers that utilize Virtual Currency solely for the purchase or sale of goods or services or for investment purposes.”
These rules also include a detailed application, a $5000 application fee, a compliance officer, compliance policies and procedures on anti-money laundering and security, capital requirements, and consumer disclosures.