Can I offer a cryptocurrency as a form of payment without violating financial regulations in New York? What are the requirements?

To offer cryptocurrency as a form of payment in New York, you must comply with the regulations set by the New York State Department of Financial Services. According to 23 NYCRR 200.3, no person shall engage in any virtual currency business activity without a license obtained from the superintendent. However, merchants and consumers that utilize virtual currency solely for the purchase or sale of goods or services or for investment purposes are exempt from the licensing requirements.

If you are engaged in virtual currency business activity, you must comply with capital requirements as stated in 23 NYCRR 200.8. Each licensee shall maintain at all times such capital in an amount and form as the superintendent determines is sufficient to ensure the financial integrity of the licensee and its ongoing operations based on an assessment of the specific risks applicable to each licensee.

Additionally, each licensee shall comply with all disclosure requirements under Federal and State laws, rules, and regulations, and shall not make any false, misleading, or deceptive representations or omissions in advertising and marketing materials. As per 23 NYCRR 200.18, each licensee engaged in virtual currency business activity shall not advertise its products, services, or activities in New York or to New York Residents without including the name of the licensee and the legend that such licensee is “licensed to engage in virtual currency business activity by the New York State Department of Financial Services.”

To obtain a license, you must submit a written application containing detailed information about your business, affiliates, management structure, financial statements, policies and procedures, and more as per 23 NYCRR 200.4. You must also demonstrate that you will be compliant with all of the requirements of this Part upon licensing.

Finally, each licensee shall submit quarterly financial statements and audited annual financial statements, together with an opinion and an attestation by an independent certified public accountant regarding the effectiveness of the licensee’s internal control structure as per 23 NYCRR 200.14.

It is recommended that you consult with a legal professional to ensure that you comply with all applicable regulations before offering cryptocurrency as a form of payment in New York.

Jurisdiction

New York

• General