Money Service Business Registration and Money Transmitter Licensing
The Financial Crimes Enforcement Network (FinCEN) requires money services businesses to register with the Department of Treasury and implement policies and procedures to prevent money laundering and terrorist financing. In addition, each state applies different legal definitions and requirements to virtual currency businesses. Virtual currency businesses need clarity on state statutes and efficient strategies for meeting varying state requirements. Our attorneys assist clients that accept, hold and/or transmit fiat and cryptocurrencies with registering as a money services a business and obtaining licenses to conduct money transmission in all 50 states.
Alternative Trading System Registration
Online trading platforms for buying and selling digital assets have risen in popularity in recent years. Before digital assets, few such marketplaces existed for private securities but the advent of blockchain technology has brought forth a wave of industry participants seeking to improve upon the traditional methods of exchanging securities and provide marketplaces emulating those that exist for publicly traded securities.
If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration. One such exemption is provided by Regulation ATS.
Alternative Trading Systems must satisfy and abundance of statutory requirements by registering with the SEC, providing investor disclosures, and meeting recordkeeping and reporting requirements. In addition, an ATS must abide by state laws in each state in which the ATS conducts business.
The attorneys at Bull Blockchain Law assist clients with developing and maintaining a comprehensive compliance plan, registering the with the SEC, and becoming a member of a self-regulatory organization, such as the Financial Industry Regulatory Authority. Our attorneys leverage deep experience with blockchain and digital assets to ensure your application, interview, and communications with regulators present a cohesive submission to minimize objections and provide the best possible chance of approval.
A person (whether an individual or a company) that engages in Virtual Currency Business Activity must obtain a BitLicense. A “Virtual Currency Business Activity” can fall into one of five types of activities involving New York or New Yorkers:
- receiving Virtual Currency for transmission or transmitting Virtual Currency;
- storing, holding, or maintaining custody or control of Virtual Currency on behalf of others;
- buying and selling Virtual Currency as a customer business;
- performing exchange services as a customer business; or
- controlling, administering, or issuing a Virtual Currency.
Certain activities may require additional licenses under New York law. For example, many BitLicensees engage in the transmission of fiat currency (e.g., U.S. dollars), which requires them to hold a money transmission license under New York Banking Law. The BitLicense allows a company to conduct Virtual Currency Business Activity involving New York or a New York Resident, but it does not replace any other licenses required under New York law.
Our attorneys are experienced in the nuances of the New York BitLicense and other laws applicable to virtual currency and are prepared to ensure your virtual currency enterprise complies with all relevant regulatory frameworks.
Services and Expertise
- Bitcoin ATMs and Cryptocurrency Kiosks
- OTC Desks and Digital Asset Liquidity Providers
- Digital Asset Exchanges
- Custody Providers
- FinCEN Registration
- Money Transmitter Licensing Applications
- Anti-Money Laundering Compliance Policies and Procedures
- Customer Due Diligence Policies
- Employee and Compliance Officer Training