BitPay To Pay $1M to New York’s Financial Services Department

An investigation found that BitPay’s cybersecurity and anti-money laundering programs were not in compliance with New York State’s Department of Financial Services regulations

article-image

Gorodenkoff/Shutterstock modified by Blockworks

share

Crypto exchange Coinbase, which disclosed receipt of an SEC Wells notice last month, was not the only major crypto company in the regulatory crosshairs. Payments provider BitPay was dealing with its own regulatory troubles.

In an underreported settlement, BitPay and the New York State Department of Financial Services (NYSDFS) came to terms on March 16, after the regulator said the company failed to ensure compliance with anti-money laundering laws and cybersecurity regulations.

“BitPay has fully cooperated with the NYSDFS and is pleased to have resolved this matter. The settlement concerned historical shortcomings in BitPay’s regulatory programs identified in a 2018 and 2021 examination conducted by NYDFS,” BitPay CEO Stephen Pair told Blockworks. 

NYSDFS said that it first examined BitPay from July 2018 to December 2018, and “found deficiencies” in regard to its cybersecurity regulations and anti-money laundering (AML) compliance programs. 

“The Virtual Currency Regulation requires that Licensees establish an effective AML program, that, at a minimum, shall provide a system of internal controls, policies, and procedures designed to ensure ongoing compliance with all applicable AML laws, rules and regulations,” the settlement said. The program requires an independent test from personnel at a “regulated entity.”

Similarly, New York’s cybersecurity regulation requires companies to “conduct a periodic risk assessment…to inform the design of the cybersecurity program and update such risk assessment(s) as necessary.” 

A second investigation starting in 2019 found that the crypto payments provider’s cybersecurity and AML programs needed “additional improvement.” 

“Throughout the exam period and since, BitPay has steadily enhanced its already rigorous compliance and cybersecurity programs to both fulfill its regulatory obligations and continue to be an example of doing business the right way in the evolving blockchain payments space,” Pair said.

BitPay agreed to a penalty of $1 million.

As part of the settlement, BitPay is required to submit an action plan to the NYSDFS before Sept. 16 this year.

“BitPay has demonstrated its commitment to remediation by devoting significant financial and other resources to enhance its cybersecurity and AML programs,” the NYSDFS said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Maple Finance has successfully navigated significant market challenges through its strategic pivot to secured lending (Maple v2) and the launch of its Syrup product. Syrup has become a primary growth driver, delivering sustainable, outperforming stablecoin yields and rapidly increasing TVL. The upcoming custody-first Bitcoin staking product (istBTC) presents another significant avenue for expansion. Crucially, Maple has achieved operational profitability, a key inflection point that, combined with a fully vested token and active buyback mechanism, strengthens its investment case. While valuation metrics suggest potential undervaluation relative to peers and growth, the primary forward-looking risk identified is the long-term sustainability of its current high-take-rate collateral staking revenue model.

article-image

The shorts looking for funding range from charming animated series to gritty live-action dramas

article-image

Money, it turns out, is emergent, like consciousness

article-image

Bridge flows churn in both directions as risk appetite returns

article-image

Even with an uncertain outlook thanks to tariffs, Big Tech executives are still ramping up their AI investments

article-image

The Infinite Node Foundation has $25 million in funding and plans to exhibit the Punks in Palo Alto

article-image

LBTC and sBTC integrations unlock new DeFi yields for BTC holders