Trading platform eToro finally entered the state of New York despite holding the BitLicense for about three years. The lapse of three years shows the regulatory hurdles and obstacles that crypto companies face in the state. Fewer than 40 companies have received approval, with just a handful actually launching services.
Multi-asset trading and investment platform eToro has finally stepped into the state of New York despite holding the legal approval or license since 2023. The platform secured a double license, the BitLicense, and also a money transmission license, which makes them eligible to serve the New York community.
While publicizing the launch of the platform, Andrew McCormick, head of eToro’s US division, stated, “New York is the heart of the financial markets and a hub of innovation.” He further mentioned the expansion as “both a strategic milestone and a reflection of our commitment to responsibly advancing the next generation of financial market accessibility.”
What is BitLicense?
BitLicense is a special regulatory license that is issued by the New York State Department of Financial Services, which a crypto company is supposed to obtain for it to operate in the state.
The license, which was introduced in 2015, was designed to bring oversight to activities like crypto trading, custody, transfers, and issuance – basically any business dealing with digital assets in the state. Only less than 40 companies received approval, with just a handful actually launching services.
BitLicense stands out because of how strict and detailed the requirements are. With the license obtained, companies are supposed to function like a financial institution, which means maintaining sufficient capital reserves, implementing strong cybersecurity frameworks, and having full AML/KYC compliance systems in place.
On top of that, they are also expected to submit regular reports, keep detailed transaction records, and be ready for audits at any time.
The difficulty in getting BitLicense
The difficulty in securing the license boils down to a few key factors. First the cost and time. The application process can take long, from months to even years, and it also requires quite a bit of legal compliance. Smaller startups often don’t get the license, as they need an entire compliance team just to meet the requirements.
Second is the level of scrutiny that goes quite deep. It does not stop with how funds are stored, checking internal controls, and executive background checks, but it’s about the entire business structure.
Thirdly, there are ongoing obligations. After securing the license, companies can’t relax, but they are expected to continuously meet strict standards. This includes updating compliance systems, reporting changes, and ensuring security measures evolve with threats. In the event that a firm fails to meet these standards, it can result in penalties or losing the license.
Since it involves the abovementioned tedious task, many crypto firms in the state prefer not to go through the process, and as such, it is referred to as the “New York crypto barrier.”
