July 12, 2020

Volume X, Number 194

July 10, 2020

Subscribe to Latest Legal News and Analysis

July 09, 2020

Subscribe to Latest Legal News and Analysis

An Empire State Glimmer of Hope for Crypto

It’s no secret that accessing the New York market is difficult, if not impossible, for some digital asset companies, especially those in their early stages.  New York’s Department of Financial Services (“DFS”) is hoping to change that—at least incrementally—with several initiatives it recently announced.  Our digital asset team will soon provide a detailed analysis of the initiatives, but in the meantime here is a brief summary:

  • Notice of License Application Procedures: Acknowledging that it “has heard concerns among BitLicense applicants regarding the duration of, and level of transparency in, the BitLicense application review process,” DFS announced two new practices: limiting the substantive review to only applications ready for such review; and limiting the number of deficiency letters for a given set of requirements.

  • Proposed Conditional BitLicense: DFS is seeking comments by August 10 on a proposed framework through which an entity seeking a BitLicense can collaborate with a current licensee (or holder of a New York limited purpose trust charter) for various services and support so that the applicant can begin offering its services in New York before obtaining its own BitLicense.

  • FAQs: Twenty-one new FAQs have been posted on DFS’ website.  They range from general questions, such as “Who needs a BitLicense,” to more specific questions like “Are ‘stablecoins’ considered Virtual Currencies under the BitLicense regulation”?  (Cliff’s Notes on the latter question: many are.)

  • Finalized Coin Listing Framework: DFS finalized the framework that a digital asset company should use to develop a coin listing policy.  Once that policy is approved by DFS, in order to offer or use a new coin, the company need only notify DFS that the coin complied with the company’s policy.  It would not need to obtain separate DFS approval.

Copyright 2020 K & L GatesNational Law Review, Volume X, Number 179


About this Author


Jeremy McLaughlin is an associate in the firm’s San Francisco office and a member of the Consumer Financial Service group. His practice focuses principally on regulatory compliance and government enforcement for Fintech and consumer financial products and services, with particular attention on emerging payments and compliance with state and federal consumer protection laws, state money transmitter licensing laws, and international remittances, as well as advising on privacy, data security, and PCI compliance. He represents and advises financial technology companies,...

Daniel Cohen, KL Gates Law Firm, Washington DC, Finance Law Attorney

Daniel Cohen is a first year associate in the Washington, D.C. office.

Admitted only in Virginia / Not Admitted in D.C.
Supervised by Soyong Cho, member of D.C. Bar