The BitLicense, introduced by the New York State Department of Financial Services, is like the bouncer’s stamp of approval for crypto businesses operating within New York. It mandates stringent KYC/AML practices, cybersecurity standards, and regular reporting. Exchanges, custodians, and certain wallet providers typically need a BitLicense to legally serve New York residents.

Critics argue it’s overly restrictive and stifles innovation by forcing startups to navigate expensive legal hurdles. Consequently, some crypto platforms have opted out of NY entirely, leading users to lament “Not available in your state.” Supporters, however, see it as a necessary regulatory framework for consumer protection in one of the world’s biggest financial markets.