In late June of 2015, the New York Department of Financial Services adopted new regulations requiring virtual currency businesses to file a surety bond and to obtain a license proving they have registered with the state.
There is no set bond amount included in these new regulations, but it must be in an amount deemed acceptable by the Superintendent of Financial Services. The bond premium has to be large enough to cover the principal’s customers if financial malpractice occurs. In the event that some sort of fraudulent behavior occurs at the hand of the principal, the affected customer can file a claim and, if approved, will not be held responsible for any financial loss that transpires. The principal will then be obligated to reimburse the surety company in a timely manner for all funds paid out. It is illegal to practice virtual currency business activities without first obtaining the proper license.
Below is a list of the application requirements:
- exact name of the applicant
- list of all the applicant’s affiliates
- applicant’s mailing address, personal history, experience, and qualifications
- background report
- fingerprint record
- organization chart of management structure
- current financial statement
- descriptions of products and services provided
- banking agreements
- compliance verification from the Department of Taxation and Finance
These new regulations are effective immediately. Contact SuretyBonds.com for any additional questions regarding these changes.