Galaxy Digital secures rare New York crypto license to tap US's largest institutional market

Galaxy Digital has secured one of the most difficult crypto approvals in the US after receiving a BitLicense and a Money Transmission License from the New York State Department of Financial Services. 

The approval allows the company to directly offer digital asset trading and custody services in New York through its subsidiary, GalaxyOne Prime NY. 

The move is important because New York is considered the biggest hub for institutional capital in the country, giving Galaxy access to major investors, hedge funds, and businesses looking to enter the crypto market under a regulated framework.

Why is the New York BitLicense such a big deal?

In the US, the BitLicense has generally been one of the strictest crypto regulatory approvals.

Since the New York State Department of Financial Services issued this initiative in 2015, companies seeking such licenses have faced cumbersome regulations on anti-money laundering controls, cybersecurity systems, compliance procedures, and capital requirements.

The hard law has led to only a few successful crypto companies (due to the strict rules) obtaining licenses over the years. Galaxy has now become part of a small list of companies approved to operate crypto services legally in New York.

The approved service, GalaxyOne Prime NY, will offer trading and custody services to residents, institutions, and businesses in the local region.

Custody systems also play a key role for institutional investors; secure storage systems are essential for digital assets before many are funded with large capital.

New York, says Galaxy founder and chief executive Mike Novogratz, has the “deepest pool of institutional capital” in the United States.

He added that digital assets were no longer marginalized in investors’ portfolios and that Galaxy would now have the opportunity to address institutions’ needs in the state directly.

The new green light bolsters the company’s global regulatory profile, it announced, which now includes more than 50 licenses worldwide.

Galaxy has about $9 billion in client assets across its digital asset business.

Institutional crypto demand continues to grow

Galaxy’s approval comes as institutional interest in crypto expands in the United States. Several large asset managers, hedge funds, and traditional financial firms have steadily increased their holdings and exposures to digital assets, especially after the approval of spot Bitcoin exchange-traded funds in the US.  

New York is still an important market as many of the nation’s largest financial institutions are based there. 

For crypto companies, access to the state gives the impression that they are more credible and have stronger compliance standards. Only a few companies have received BitLicenses recently. 

Earlier this year, the Bitcoin payments company founded by Jack Mallers, Strike, got approval in March. In 2025, only two companies, MoonPay and Bullish, were awarded BitLicenses. 

The small number of approvals indicates just how selective New York regulators remain when evaluating crypto companies. 

Many companies have avoided entering the state in the past due to the exorbitant compliance costs and the lengthy approval process associated with the BitLicense.

What does this mean for Galaxy Digital?

For Galaxy Digital, the approval could strengthen its position in the emerging institutional crypto market. 

As part of its growing institutional crypto market, such a regulation also enables Galaxy Digital’s growth in its existing services as it continues to expand into asset-centric digital products, such as trading, asset management, investment banking, and custody solutions for digital assets. 

With access to New York clients directly on its doorstep, Galaxy can compete more aggressively with crypto-native newcomers on both sides of the market as traditional financial institutions shift the market landscape. 

Firms with strong regulatory approvals are likely to see an edge as larger investors move on towards new ways of participating in the market that are more secure and regulated. 

For it may indicate, more generally, changes in its sector, as firms increasingly emphasize obtaining licenses and cultivating relationships with regulators to expand into New York City. 

Where some crypto companies have previously balked at tight state rules, others now view regulatory approval as a key to accessing institutional capital and sustained growth. 

With more and more institutional money pouring into digital assets, New York crypto is likely to remain a fiercely competitive space. 

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