Cryptocurrency exchange license in New York

A cryptocurrency exchange license in the United States entitles its holders to conduct cryptocurrency exchange transactions. In addition to crypto exchanges, other entities wishing to provide payment services are also interested in obtaining such a license. The licensing of a cryptocurrency exchange in the United States is a rather painstaking process. Below we will consider everything in more detail.

What status will the persons who are going to provide cryptocurrency exchange services have?

Potential applicants for a license to conduct cryptocurrency exchange activities will be recognized as money service businesses (MSBs).

What license should MSBs obtain to legally conduct their activities?

• If a company is going to act as an intermediary in transactions for the exchange of cryptocurrencies for real money (crypto - fiat), it must obtain a Money Transmitter License.
• If a company intends to act as an intermediary in transactions for the exchange of cryptocurrencies for other cryptocurrencies (crypto to crypto), it should obtain an MSB License and analyze the requirements of the legislation of each individual state.

What are the requirements for persons with MSB status to obtain a cryptocurrency exchange license in the United States?

• Register with the U.S. Department of the Treasury (registration must be renewed every two years);
• Provide lists of their agents;
• Report suspicious transactions;
• Adhere to anti-money laundering and anti-terrorist financing policies;
• Provide reports on transactions exceeding USD 10 thousand;
• Keep information about money transfers;
• Comply with the rules for transferring funds;
• Report on currency exchange;
• Maintain other types of reporting.

These requirements must also be met by non-US residents who conduct cryptocurrency exchange activities in the United States.

What are the peculiarities of obtaining a license for cryptocurrency exchange in the United States?

• The peculiarities of licensing cryptocurrency activities in the United States lie in the federal structure of the United States. In addition to the requirements of the state regulator, almost every state has its own requirements. The latter may differ from each other. Accordingly, if a crypto exchange wishes to provide cryptocurrency exchange services in several states, its activities will be subject to licensing in each such state.

For example, the state of New York requires a special license called BitLicense to operate in the field of cryptocurrency exchange. However, not all states have yet finalized their position on cryptocurrency exchange activities. In addition, the position of regulators may change from time to time.