As BitLicense deadline approaches, where will New York businesses go?

Currently, the digital currency ecosystem in New York State is facing an approaching deadline for BitLicense applications. Today, August 8, 2015, marks the end of a 45-day grace period, meaning that Bitcoin and digital currency companies in the state will need to apply for a BitLicense in the future.

Some Bitcoin companies, such as ShapeShift, Eobot and Poloniex, have already left New York State. ItBit became the first Bitcoin company to obtain a BitLicense, and the license of Gemini Exchange, run by the Winklevoss brothers, is still awaiting confirmation. These companies are all classified within the rules, while the fate of companies that fall outside the rules is still unknown.

The BitLicense has been controversial since it was first introduced by Benjamin Lawsky, head of the New York State Department of Financial Services. The draft BitLicense has been revised three times due to opposition from the Bitcoin community.

Few companies submitted applications at the last minute like MonetaGo. According to MonetaGo's CEO, the company submitted a 500-page application that took the legal team nearly a month to prepare. It also submitted a $5,000 application fee. But even paying the $5,000 fee does not guarantee that the company will get a license.

The BitLicense imposes many restrictions on the Bitcoin ecosystem, which is still in its infancy, and hinders innovation in digital currency and blockchain technology. Because of the BitLicense, related companies may violate privacy regulations and increase the risk of data and stored user information being leaked.