Galaxy Digital wins New York BitLicense for institutions

Galaxy Digital secured a BitLicense and a Money Transmitter License from the New York Department of Financial Services on May 18. The approvals authorize GalaxyOne Prime NY to offer regulated trading and custody services to institutional clients across New York State.

Under the licenses GalaxyOne Prime NY can serve investment advisers, hedge funds and family offices directly on Galaxy’s trading and custody platform without routing through offshore entities or intermediaries.

Galaxy is listed on Nasdaq and holds more than 50 global licenses. The firm reports managing about $9 billion in client assets in its digital asset business. The New York approvals follow a reorganization tied to the company’s Nasdaq listing and extend its onshore presence.

Founder Mike Novogratz wrote that Galaxy was built to meet demand from institutional capital and that the approvals allow the firm to serve New York institutions directly.

The BitLicense framework, introduced in 2015, requires applicants to implement anti-money laundering programs, adopt board-approved cybersecurity standards and hold capital reserves that often reach seven figures. Regulators typically require separate approval for each digital asset a firm plans to offer.

Emily Goodman, a fintech attorney who tracks state crypto policy, noted applicants commonly face 18 to 24 months of review, more than 10 rounds of regulator feedback and upfront costs that can reach high six or seven figures. Goodman described the process as ‘one of the most rigorous and time-intensive licensing processes in financial services.’

Industry data show fewer than 40 firms currently hold an active BitLicense. Critics argue the licensing requirements favor established firms with legal, cybersecurity and capital resources, which can make it difficult for smaller startups to serve New York. Supporters say a regulated onshore venue provides a compliant option for trustees and advisors.

Market observers say the key tests will be whether Galaxy can onboard New York institutional clients and convert access to its platform into client inflows and revenue growth.