From research to a working plan.
Regulation and authorities
FinCEN’s guidance examines business models involving convertible virtual currency under the Bank Secrecy Act. The analysis depends on the services provided and whether an activity constitutes money transmission. Build a federal-and-state requirements map for the actual product, customer locations and custody arrangements before deciding where to incorporate or operate.
Exchanges and provider checks
New York’s DFS publishes licensed virtual currency businesses and chartered entities. Its FAQ explicitly says FinCEN registration does not determine whether a BitLicense is also required. For a service involving New York or New Yorkers, check the relevant NYDFS entry and permission. Record the exact entity offering custody or exchange services in the customer contract.
Taxes and records
The IRS treats digital assets as property for federal tax purposes. Income from digital assets is taxable, and transactions may need reporting on a tax return. Keep acquisition dates, dollar values, disposal proceeds and transaction fees. Reconcile broker information with the complete wallet and exchange history used to establish each transaction’s treatment.
Starting a business
FinCEN provides guidance across convertible-virtual-currency business models. New York separately describes the BitLicense and relevant charter routes. Start by mapping who controls customer assets, how funds move and which states the service reaches. Use that map to identify the applicable applications and controls before accepting customer deposits.
Banking and payments
A New York virtual currency business may also need money-transmission permission when transmitting fiat currency. Discuss the exact fiat settlement and custody model with banking counterparties. Distinguish corporate operating funds from customer funds in the proposed account structure, and document which entity is responsible for each payment and withdrawal.
Related coverage
Country-specific reporting will appear here as it is published. Explore the jurisdiction’s official updates in the sources above.
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