The New York Department of Financial Services (NYDFS) has proposed changes to the BitLicense regime, which could toughen up the process for listing coins in the state.
The NYDFS has set out what it describes as the “first step” to reviewing the license, which has been in operation since 2015. A total of 18 companies hold BitLicense, including Robinhood, Square, Coinbase, and Tagomi.
Under the BitLicense, the NYDFS works with regulated firms on a one-to-one basis, to establish the liquidity, impact, and compliance of proposed coin listings in the state.
Obtaining a license already incurs legal fees in the order of $100,000, with the proposed review likely to make the terms of the BitLicense even more stringent.
The proposed rule change would introduce a new website detailing all coins that have received the blessing of the regulator, alongside a framework for listing coins that can be tailored to the business model of VC licensees.
The framework would compete with the existing structures many exchanges already use to list coins in the state, though it remains far from clear whether these existing frameworks would be compatible. The rule change could have the effect of forcing some New York-based exchanges to withdraw coins and relist them under the new structure, to comply with the new rules.
The proposals are open to consultation until the end of January 2020. While firms would not be required to reapply for licenses they already hold, there would be an expectation that they would comply with the terms of the new BitLicense compliance rules.
NYDFS superintendent Linda Lacewell said the measures were an essential part of supporting the market as regulators: “This is an important first step in our review of our virtual currency regime and is designed to make it easier for those who have obtained a New York license to periodically add new coins to their existing products.”
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