New York is the first state in the US to lay down rules governing virtual currency business activity. On last June 3^rd, the New York Department of Financial Services (DFS), by Mr. Benjamin M. Lawsky, as Superintendent of Financial Services, published the Regulation on the virtual currency activities. The rules have been settled after a two-year long investigation into crypto-currency. They contain, among others, guidelines to prevent money laundering and cyber security for all those companies using virtual currency, including Bitcoin.

The range of recipients of such regulation is wide. The concerned provisions are addressed to all the financial operators that receive virtual currency to transmit virtual currency, as well as to store, hold, or maintain custody or control of Virtual Currency on behalf of others, performing exchange services as a customer business as well as to check, manage, or issue a virtual currency. Nobody is excluded from the list of operators, neither the platforms of exchange, nor the wallet, nor the miners.

The requirement to conduct business through virtual currency is to obtain a license from the Department of Financial Services; merchants and consumers that utilize virtual currency only for the purchase or sale of goods or services as well as for investment purposes and software developers are exempt from the licensing requirements. In order to submit the license application, the Regulation provides numerous and mandatory requirements, further to the non-refundable payment of a registration fee, amounting to five thousand dollars. An extensive investigation by the superintendent for financial services follows on from the license application; once the license has been issued, the superintendent shall continue to perform specific inspections and verification, according to his legitimacy. Every licensee must respect and ensure respect of compliance policies, including those against fraud, money laundering, cyber security and privacy, by designating a qualified responsible. Each licensee shall maintain at all times such capital in an amount and form as the superintendent determines is enough to ensure the financial integrity of the licensee and its ongoing operations as based on the assessment of the specific risks. Any plan or proposal to introduce or to offer a materially new product, service, or activity, shall require the prior written approval of the superintendent. Likewise, no action shall be taken, except with the prior written approval of the superintendent, that may result in a change of control of a licensee or in a merger or acquisition of all or a substantial part of the assets of a licensee. Each licensee shall make, keep, and preserve all of its books and records in their original form or native file including each transaction. Finally, the Regulation lays down certain rules to protect consumers concerning the disclosure requirements, the terms and conditions of the contract, the right to submit complaints. The system, as intended by the New York Department of Financial Services, aims to protect customers and root out illicit activity, without however stifling beneficial innovation. Bitcoin and other virtual currencies deserve increased attention: they gained a big swing in popularity both in the global technology community and on Wall Street. The Nasdaq OMX Group and the New York Stock Exchange announced initiatives concerning Bitcoin, as well as on last month, Goldman Sachs invested in Circle, a start-up that aims to use the technology underlying Bitcoin to improve consumer payments.

The Regulation works to become a model for other States; everyone recognizes the role of New York as a financial authority able to influence even Washington.