VIACHESLAV KUTUZOV, Esq.

New York Attorney and Counselor-at-Law

New York BitLicense (Virtual Currency) Licenses

My practices

New York State BitLicense (Virtual Currency)

New York State
Money Transmitter License

FinCEN Money Business License

Anti-Money Laundering Polices & Compliance

New York Money Transmitter License

A New York Money Transmitter License (NYMTL) is a critical regulatory authorization for any business engaged in money transmission within the state. Under New York Banking Law, an entity may not sell or issue checks, or receive and transmit funds, unless it is licensed by the Superintendent of the Department of Financial Services (DFS). Similar licensing obligations apply across most U.S. jurisdictions, including the District of Columbia.

Businesses must secure an NYMTL when they conduct activities such as issuing or selling money orders or traveler’s checks; transferring funds between parties or locations; cashing checks of $1,000 or more for any individual on any given day; exchanging or dealing in currency exceeding $1,000 per day per person; offering or selling prepaid access or stored-value products; or providing bill-payment services.

New York law exempts certain regulated financial institutions—including banks, trust companies, savings banks, and credit unions—from this requirement. For all others, the NYMTL is mandatory when these activities are performed using fiat currency.

Virtual Currency Business Activity License ("BitLicense")

A New York Money Transmitter License (NYMTL) is a central regulatory credential for businesses engaged in money transmission. New York Banking Law prohibits any person or entity from selling or issuing checks, or from receiving and transmitting funds, without first obtaining a license from the Superintendent of the Department of Financial Services (DFS). Comparable licensing rules apply across most U.S. states and the District of Columbia.

An NYMTL is required for companies involved in activities such as issuing or selling money orders or traveler’s checks; transferring funds between individuals or locations; cashing checks of $1,000 or more for any person in a single day; conducting currency exchange or dealing above the $1,000-per-day threshold; offering or selling prepaid access or stored-value instruments; or providing bill-payment services.

Certain regulated financial institutions – such as banks, trust companies, savings banks, and credit unions – are exempt from the licensing requirement. For all other businesses, the NYMTL is mandatory when these activities are carried out using fiat currency.

Federal Registration of Money Services Businesses (MSB)

In addition to state licensing obligations, certain Money Services Businesses (MSBs) are subject to federal registration requirements under the Bank Secrecy Act (BSA). MSBs must register with the Financial Crimes Enforcement Network (FinCEN) within 180 days of commencing operations. Once registered, they must also maintain an up-to-date list of their agents and update that list on an annual basis.

A business is classified as an MSB – and therefore must register with FinCEN – if it engages in any of the following activities: issuing or selling money orders; issuing or selling traveler’s checks; transmitting money in any amount; cashing checks exceeding $1,000 for a single individual in a single day; conducting currency exchange or dealing above $1,000 per person per day; or issuing, selling, or redeeming stored value when combined with any of the preceding services.

Entities operating solely as agents of another MSB are exempt from registration, as are the U.S. Postal Service and governmental agencies.

Combined State and Federal Services

ecuring a New York Money Transmitter License, obtaining a BitLicense where required, and completing federal MSB registration are separate regulatory steps, yet they function as an integrated compliance framework. We support clients through each of these processes, delivering a coordinated and end-to-end solution. Our services encompass entity formation, preparation of license applications, and development of supporting documentation, including AML/CFT programs. By managing both state and federal obligations, we position your business to operate confidently and compliantly within a highly regulated financial environment.

Our Process: A Step-by-Step Guide

Navigating the licensing and registration process for a financial institution can be complex, but with our expertise, you can confidently and efficiently launch your business. We will guide you through each stage, from initial preparation to final approval, ensuring every detail is handled correctly.

Step 1: Initial Consultation

We begin with a thorough consultation to understand your business model, services, and corporate structure. This crucial first step allows us to tailor our approach to your unique needs, identifying potential challenges and developing a strategic plan for success.

Step 2: Company Formation

Before we can proceed with the application, your business must be legally established. We assist with the necessary initial filings, including registering your entity with the New York Department of State (NYSDOS) to ensure it is legally authorized to do business in New York. This foundational step is critical for a smooth application process.

Step 3: Application Preparation and Documentation

The application for a New York Money Transmitter License and federal MSB registration requires extensive and meticulous documentation. We will work with you to prepare and organize all required forms and supporting documents, including:

Company Form (MU1): A detailed form outlining your business structure, ownership, and financial information.
Individual Form (MU2): Required for all control persons within the company, including officers, directors, and significant owners. This form details their background, financial history, and other relevant information.
Organizational Documents: We will help gather and prepare all necessary corporate documents.
Business Plan: A comprehensive plan detailing your business model, target market, and financial projections.
Biographical Statements: Detailed statements for all key individuals.
Financial Statements: Required for both the company and control persons.
Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) Program: We will assist in developing a robust AML/CFT program that meets both state and federal requirements.
Surety Bond: We will advise you on the requirement for a surety bond, which for a New York Money Transmitter License, is a minimum of $500,000.

Step 4: Submission and Regulatory Liaison

We manage the submission of your application through the Nationwide Multistate Licensing System and Registry (NMLS). The NMLS is the official system used by the New York Department of Financial Services (NYDFS) to process license applications. We will act as a liaison between your company and the regulatory authorities, responding to any inquiries and addressing any concerns that may arise during the review process.

Step 5: Final Approval and Ongoing Compliance

Once the NYDFS has reviewed and approved your application, your New York Money Transmitter License will be granted. Similarly, we will ensure your FinCEN registration is successfully completed. Our services don't end with approval; we can also advise on ongoing compliance requirements to ensure your business remains in good standing with both state and federal regulators.

Frequently Asked Questions

FAQs

What is a Money Transmitter License?

A Money Transmitter License (MTL) is a state-level license required for businesses that transmit money on behalf of others. This includes services such as wiring money, issuing money orders, and cashing checks above a certain threshold. In New York, this license is overseen by the Department of Financial Services (NYDFS).

What is the difference between a state license and federal registration?

A state license (like the NYMTL) authorizes your business to operate within that specific state and is granted by the state's financial regulator. Federal registration is a separate requirement under the Bank Secrecy Act (BSA) where certain money services businesses (MSBs) must register with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury. Your business may need both to be fully compliant.

What is the NMLS?

The Nationwide Multistate Licensing System and Registry (NMLS) is an online platform used by state regulatory agencies to manage license applications and renewals. In New York, the NYDFS uses the NMLS to process applications for the Money Transmitter License.

Is a "BitLicense" the same as a Money Transmitter License?

No, a BitLicense is a specific license required in New York for businesses engaged in virtual currency activities. While a money transmitter license covers traditional forms of money, the BitLicense is an additional requirement for businesses that use, store, or transmit virtual currencies. Depending on your business model, you may need to obtain both.

What is the minimum capital requirement for a New York Money Transmitter License?

The minimum capital requirement varies. It is determined by the Superintendent of the NYDFS based on factors such as the volume of business, financial condition, and type of services offered. However, a surety bond is required with a minimum amount of $500,000.

What is the role of an AML/CFT program?

An Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) program is a mandatory set of policies, procedures, and internal controls designed to prevent your business from being used for illegal activities. Both the NYDFS and FinCEN require that your business have a comprehensive and well-documented AML/CFT program in place.

Documents & Compliance

New York State Money Transmitter License

Documents needed for licensure

Here’s the list of documents required for the New York Money Transmitter License application based on the checklist you provided:

Financial Statements – Two most recent years of audited financial statements (or initial statement for startups).
Other Trade Name Documentation – Authorization to do business under a trade/assumed name, if applicable.
Resident/Registered Agent Information – Listed in the MU1 form.
Non-Primary Contact Employees – Identified in MU1 for accounting, licensing, complaints, legal, and pre-exam contact.
FinCEN Registration Confirmation – Number and filing date.
Bank Account Information – Domestic and foreign bank details used for money transmission and credit facilities.
Chief Compliance Officer Documentation – Experience and training evidence; MU2 form for individual.
Credit Report – For required individuals.
Credit Report Explanations – Documentation for derogatory items, if applicable.
AML/BSA Policy – Detailed compliance program description.
IT Policy and Procedures – Cybersecurity and penetration/vulnerability testing documentation.
Business Plan – Including marketing, products, markets, structure, jurisdictions, pro forma financials, and assumptions.
Certificate of Authority / Good Standing – Dated within 60 days of application.
Agent and Correspondent Policies – Procedures for agents, contracts, and related documentation.
Document Samples – Customer agreements, operating agreements, receipts, money orders, etc.
Flow of Funds Structure – Narrative and diagram for transaction processing.
Formation Documents – Depending on entity type (Articles, By-Laws, Partnership Agreements, Trust Certificates, etc.).
Management Chart – Names and titles of directors, officers, managers; reporting lines.
Organizational Chart/Description – Ownership percentages, subsidiaries, affiliates, 10%+ owners.
Permissible Investments List – With book or market values.
Permissible Investments Affidavit – Compliance with Section 651 of the Banking Law.
Surety Bond – Minimum $500,000, mailed to NY-DFS.
Legal Name/Status Documentation – Driver’s license or passport for individuals.
Personal Financial Statement – For 10%+ owners, all officers, and certain indirect owners.
Authority to Release Information – Signed form for each control individual.
Restricted Words Approval – If applicable to company name.
Branch Location List – Address and contact for each branch.
Fingerprints for Control Individuals – As per NY-DFS instructions.
Foreign Control Person Background Reports – If control person lived outside the U.S. in past 5 years.

New York State BitLicense (Virtual Currency)

Documents needed for licensure

Here’s the list of documents required for the New York Virtual Currency Business Activity Company License from your checklist:

Financial Statements – Two most recent years of audited statements (or initial statement for startups; unaudited allowed with explanation).
Other Trade Name Documentation – Authorization to do business under assumed name, if applicable.
Resident/Registered Agent Information – Listed in MU1.
Non-Primary Contact Employees – For accounting, licensing, complaints, legal, and pre-exam contact.
FinCEN Registration Confirmation – Number and filing date.
Bank Account Information – Domestic and foreign accounts for VC business and credit facilities.
Direct Owners & Executive Officers – MU2 forms for each; includes chief compliance officer and AML/BSA officer qualifications.
Indirect Owners – MU2 forms for each.
Qualifying Individuals – MU2 forms if required by NY-DFS.
Credit Report – For required individuals.
Credit Report Explanations – Documentation for derogatory items, if applicable.
AML/BSA Policy – Most recent policy, implementing procedures, risk assessment, methodology, and independent review.
Business Plan – Detailed company and product info, fee schedule, valuation methods, insurance, third-party services, wallet structure, licensing status, projected financials, and assumptions.
Certificate of Authority / Good Standing – From formation state and NY, dated within 60 days.
Company Staffing & Internal Policies – Privacy & security, cybersecurity, vendor management, business continuity, consumer protection, anti-fraud, complaints, and related SLAs/agreements.
Ownership Itemization – List of all individuals/entities with direct or indirect ownership interests and percentages.
Document Samples – Disclosures, agreements, receipts, confirmations, etc.
Flow of Funds Structure – Narrative and diagrams for all transaction types (VC and fiat).
Formation Documents – Depending on entity type (Articles, By-Laws, Partnership Agreements, Trust Certificates, etc.).
Management Chart – Names/titles of directors, officers, managers, business units, and reporting lines.
Organizational Chart/Description – Ownership percentages, parents, affiliates, subsidiaries, 10%+ owners.
Surety Bond OR Trust Account Authorization – $500,000 minimum; proof mailed to NY-DFS.
Photo Identification – Government-issued ID for individuals.
Personal Financial Statement – For direct/indirect owners, executives, and qualifying individuals.
Authority to Release Information – Signed form for each direct/indirect/qualifying individual.
Verification of Experience – Resume or CV for each MU2 individual.
Restricted Words Approval – If applicable to company name.
Fingerprints for Control Persons – Per NY-DFS fingerprinting instructions.
Foreign Jurisdiction Background Reports – For MU2 individuals who have not resided in the U.S. in past 5 years; includes credit, criminal, employment, media, and regulatory history.

FinCEN Money Services Business Registration

Documents needed for registration

Federal registration as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN) is a distinct requirement from state licensing. While the primary submission is the registration form itself, FinCEN mandates the retention of specific supporting documentation for a period of five years. This information must be maintained at a location within the United States.

Here's a breakdown of the required documentation and information you must retain:

Registration Form: A complete copy of the FinCEN Form 107, "Registration of Money Services Business," as filed with the IRS Detroit Computing Center (DCC). This form is the core document for your federal registration.
Estimate of Business Volume: Documentation providing an estimate of your MSB's projected business volume for the upcoming year. This helps FinCEN understand the scale of your operations.
Ownership or Control Information: Detailed information regarding the individuals or entities that own or control your MSB. This typically includes identifying information for beneficial owners and those with significant control.
Agent List: A comprehensive listing of all agents that your MSB has authorized to sell or distribute its money services. This list must be updated annually and typically includes the agent's name, address, telephone number, types of services provided, gross transaction amounts, and the depository institution where they maintain a transaction account for MSB funds.

These requirements are outlined in 31 CFR 1022.380(b)(1)(iii) and (d), and in the instructions accompanying the FinCEN registration form. Our firm assists in ensuring you meet both the registration and record-keeping obligations to remain compliant with federal regulations.

Anti-Money Laundering Policies & Compliance

Regulatory compliance is a critical component of establishing and maintaining a financial institution. Our services include drafting and implementing the robust policies required to meet the stringent standards set by regulatory bodies such as the New York Department of Financial Services (NYDFS) and the Financial Crimes Enforcement Network (FinCEN). Our comprehensive approach ensures that your business not only gains licensure but also operates with a strong framework to combat illicit financial activities.

We provide drafting services for the following essential policies:

Anti-Money Laundering (AML) / Bank Secrecy Act (BSA) Policy: This foundational policy is designed to prevent your business from being used for money laundering and terrorist financing. It includes detailed procedures on customer due diligence, suspicious activity monitoring and reporting, and record-keeping, as required by both state and federal regulations. Our policies are tailored to your specific business model and risk profile, ensuring compliance with both New York's Part 416 regulations and the federal BSA.
Know Your Customer (KYC) Program: A KYC program is a core component of your AML framework. We will draft policies that establish procedures for verifying the identity of your customers, understanding the nature of their business, and assessing their risk profile. This includes procedures for identifying beneficial owners and conducting ongoing monitoring of customer accounts.
Transaction Screening and Filtering Program: This program, required by New York's Part 504 regulations, is designed to ensure that transactions are screened against sanctions lists, such as those maintained by the Office of Foreign Assets Control (OFAC). We will draft policies that outline the procedures for this screening and the steps to take when a potential match is found.
Information Technology (IT) Security Policy: A robust IT security policy is mandatory to protect sensitive customer data and your business's systems. This policy, which we draft to comply with New York's Part 500 regulations, covers key areas such as access control, business continuity management, incident response, and vendor management.
Agent and Correspondent Policies: For businesses that utilize agents or correspondents, we will draft detailed policies covering agent selection, contract procedures, record-keeping, remittance protocols, and compensation arrangements, as required by the NYDFS.
Flow of Funds Structure: We draft a clear and detailed description of your business's transaction flow, including a flowchart, which explains each step from the initial customer interaction to the final settlement of funds. This document clarifies the roles and liabilities of all parties involved in a transaction.