USA – NEW YORK Trends and Developments Contributed by: Dario de Martino and Susan Gault-Brown, A&O Shearman
Navigating New York’s Crypto Regulations: a Strategic Roadmap As we move through 2026, cryptocurrency regula- tion has reached an inflection point that, only a year ago, many predicted would dissolve New York’s pri- macy. The opposite has happened. Federal policy has finally arrived, in scale and at speed: the GENIUS Act became law in July 2025, the Securities and Exchange Commission (SEC) and Commodity Futures Trad- ing Commission (CFTC) issued a joint interpretation in March 2026 establishing a five-part crypto-asset taxonomy and narrowing the circumstances in which many crypto-assets are treated as securities, and the CLARITY Act cleared the Senate Banking Commit- tee in May. The conventional wisdom – that state- level licensing would be eclipsed by a unified federal regime – has rarely seemed more confident, or aged more quickly. Ten years after its arrival, the BitLicense is more important, not less. New York remains both a pioneer and gatekeeper and continues to demand excellence through exhaustive oversight. The BitLicense Legacy: Setting the Gold Standard When the New York State Department of Financial Services (NYDFS) introduced the BitLicense frame- work under the 23 Compilation of the Rules and Regu- lations of the State of New York (NYCRR) Part 200 in 2015, the crypto industry reacted with a mixture of respect and worry. Here was a comprehensive regula- tory regime that treated digital assets with the same seriousness as traditional financial instruments – a radical notion when Bitcoin was still widely dismissed as internet funny money. BitLicense requirements read like a checklist designed by someone who had watched every conceivable way that a financial institution could fail. Applicants must provide audited financial statements, demonstrate robust anti-money laundering/know-your-customer (AML/KYC) programmes, implement robust cyber- security controls, and maintain individualised capital reserves. The message was clear: if you want to play in the financial sandbox of New York, you act like a financial institution.
This high standard had predictable consequences. Many crypto start-ups simply avoided New York, creating what commentators called the BitLicense exodus. However, those that stayed and succeeded gained something invaluable: legitimacy. A New York BitLicense became the crypto equivalent of a Michelin star, difficult to obtain, expensive to maintain, but ulti- mately a mark of distinction that opened opportunities worldwide. By June 2025, the framework had quietly turned ten. The conditional pathway introduced in 2020 continues to draw entrants by way of partnership with estab- lished licensees, with PayPal’s tie-up with Paxos being the canonical example. Full BitLicences were granted to MoonPay USA LLC in June 2025 and to Peter Thiel- backed Bullish in September; in 2026, Strike cleared the bar in March and Galaxy Digital followed in May, authorised to offer regulated trading, custody and transmission services to institutional clients. The bar remains high, but it can be cleared. The 2023 Paradigm Shift, Sharpened by 2025 The 15 November 2023 guidance on coin-listing and delisting represented more than updated requirements – it was a fundamental shift in regulatory philosophy. Where the original BitLicense focused on institutional safeguards, the new framework addressed a more nuanced challenge: how do you evaluate and manage risk in an ecosystem where new assets appear daily? The answer, according to the NYDFS, lies in forcing firms to think like regulators themselves. The require- ment for board-level approval of listing and delisting policies is not about adding bureaucratic layers; it is about pushing crypto-asset risk decisions into the firm’s formal governance architecture. Once oversight of listing policies and risk appetite sits with the gov- erning body, DeFi protocols, bridge architectures and tokenomics become board-relevant topics rather than back-office detail. The NYDFS extended that posture in 2025. In a Janu- ary 16th industry letter (echoed by a parallel consumer alert), the Department put licensees on notice that “rapidly proliferating, sentiment-based” tokens – meme coins, in plain English – are generally incompatible with its Coin-Listing and Market-Manipulation guidance, cit-
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