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U.S. MONEY TRANSMITTER LICENSING

For Digital Payment Systems & Crypto-Related Businesses in the U.S.

Summary
Money Transmitter Licensing
Service Type
Money Transmitter Licensing
Provider Name
Dilendorf Law Firm,
60 Broad Street, 24th Floor,New York,New York-10004,
Telephone No.212.457.9797
Area
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Description
Money Transmitter Licensing - the state and federal licenses required to operate as a Money Services Business (MSB)

Dilendorf law Firm assists clients with obtaining and maintaining Money Transmitter Licenses (MTLs) – the state and federal licenses required to operate as a Money Services Business (MSB).

We regularly represent the following types of use-cases in connection with MTL projects:

  • cryptocurrency exchanges
  • digital payment platforms and apps
  • stablecoin issuers and payment systems
  • cross-border payment and remittance solutions facilitating payments between US, Mexico, India, European and African Countries (Tanzania, Kenya, Uganda, Rwanda, Ghana and South Africa)
  • DeFI platforms switching to CeFI models
  • Metaverse businesses and payment processors
  • play-to-earn game operators
  • liquidity pool providers
  • OTC desks

Most often than not, these use-cases are subject to Bank Secrecy Act (“BSA)” regulations and enforcement as well state MTL regulations.  

We strive to understand our client’s background, goals and other critical factors when advising clients on the best BSA/AML & MTL strategies.

ATTORNEYS' EXPERIENCE

ATTORNEYS' EXPERIENCE

Representing a digital asset payments/lending platform with obtaining MTL licenses in all 50 states

ATTORNEYS' EXPERIENCE

Obtaining a series of MTL no-action letters for various digital asset uses cases from multitude of states, including P2P trading platforms, Bitcoin ATM projects, liquidity pool providers and lending platforms using third-party escrow agents

ATTORNEYS' EXPERIENCE

Advising a cross-border startup facilitating payments between US and select African countries (Tanzania, Kenya, Uganda, Rwanda and Ghana) on obtaining money transmitter licenses in US

ATTORNEYS' EXPERIENCE

Advising U.K.-based operator with entering the US stablecoin market and obtaining money transmitter licenses instead of a traditional bank charter in compliance with a proposed Stablecoin Transparency Act

Helping Clients Navigate Through MTL Requirements and Challenges

With limited exceptions, any business that accepts and transmits funds, including cryptocurrencies, such as bitcoin, will be considered an MSB and require an MTL in each U.S. state where the business operates.

Money transmitters are a part of a broader category of MSBs. So, the terms MTL and MSB are related and often used together.

While registration on the federal level is relatively straightforward, the MSB legislation is not harmonized and almost all 53 states and territories have their own regulations, requirements and exceptions for money transmitter licensure.

In addition, New York established a separate license for digital currency businesses, the so-called “BitLicense” – a license required to engage in any “virtual currency business activity”.

MTL requirements vary state-by-state but usually include registration with the Financial Crimes Enforcement Network (FinCEN), background checks, application fees, security (surety bond), maintenance of permissible investments, minimum net worth, business plan and a compliance program.

MTL-related costs and processing times may differ significantly from state to state, especially compared to New York and California.

Because of the lack of consistent regulation, companies tackling the U.S. MSB market must develop a comprehensive strategy to get MTLs.

When obtaining MTLs, a business may choose to prioritize some states and apply first there but will be prohibited from operating in the states where it does not maintain an MTL.

Stablecloin TRUST Act of 2022

Stablecoins are digital assets that are designed to maintain a stable value relative to a national currency or other reference assets.  Stablecoins have experienced tremendous growth in the past year, serving as a possible breakthrough innovation in the future of payments. 

A dollar-pegged stablecoins backed by adequately safe and liquid collateral can potentially serve as a digital safe haven currency during periods of crypto market distress. 

The Stablecoin Trust Act  requires a stablecoin issuer to hold all reserves associated with each fiat currency-backed stablecoin they issue in (1) certain government securities; (2) fully collateralized security repurchase agreements, or (3) U.S. dollars or other nondigital currency.

Further, the Act provides that payment stablecoin issuers must choose from one of three regulatory regimes:

  1. A state-based money transmitter or similar license under state law;
  2. A traditional bank charter; or
  3. A new federal license designed specifically for payment stablecoin issuers.

The state-based MTL route is the most economical option.

A fiat currency-backed stablecoin is a digital asset backed by a nondigital currency and is redeemable on a one-to-one basis in that currency. Under the proposed Act, each stablecoin issuer must publish monthly on their website a report on the reserves held by the issuer that has been audited by a third party.

Guiding Clients Through MTL Application Procedures in Every State

Our lawyers advise and assist clients throughout the MTL application process, including the following steps:

  • Developing an MTL strategy nation-wide for traditional businesses and cryptocurrency trading platforms and exchanges;
  • Selecting and establishing optimal corporate and tax business structures supporting US and cross-border payments and remittances;
  • Preparing a business plan, summary of historical and current operations, financial statements, affidavits and other required documentation;
  • Submitting applications in individual states;
  • Acquiring mandatory surety bonds;
  • Completing FinCEN registration;
  • Accomplishing necessary corporate actions, including local qualification of out-of-state companies, provision of registered agents, drafting/amending corporate governance documents;
  • Developing anti-money-laundering (AML) and other compliance programs;
  • Representing clients in communications with the federal and state agencies; and
  • Maintaining and renewing MTLs.

Resources:

Federal

State Money Transmitter Licensing Authorities:

State State Money Transmitter Licensing Authority
Alabama Alabama Securities Commission
Alaska Alaska Division of Banking and Securities
Arizona Arizona Department of Financial Institutions
Arkansas Arkansas Securities Department
California California Department of Business Oversight
Colorado Colorado Division of Banking
Connecticut Connecticut Department of Banking
Delaware Delaware Office of the State Bank Commissioner
District of Columbia District of Columbia Department of Insurance, Securities and Banking
Florida Florida Office of Financial Regulation
Georgia Georgia Department of Banking and Finance
Hawaii Hawaii Department of Commerce and Consumer Affairs
Idaho Idaho Department of Finance
Illinois Illinois Department of Financial & Professional Regulation
Indiana Indiana Department of Financial Institutions
Iowa Iowa Division of Banking
Kansas Kansas Office of the State Bank Commissioner
Kentucky Kentucky Department of Financial Institutions
Louisiana Louisiana Office of Financial Institutions
Maine Maine Office of Consumer Credit Protection
Maryland Maryland Department of Labor, Licensing & Regulation
Massachusetts Massachusetts Office of Consumer Affairs and Business Regulation
Michigan Michigan Department of Insurance and Financial Services
Minnesota Minnesota Department of Commerce
Mississippi Mississippi Department of Banking and Consumer Finance
MIssouri MIssouri Division of Finance
Montana Montana Division of Banking & Financial Institutions
Nebraska Nebraska Department of Banking and Finance
Nevada Nevada Department of Business & Industry
New Hampshire New Hampshire Banking Department
New Jersey New Jersey Department of Banking & Finance
New Mexico New Mexico Regulation and Licensing Department
New York New York Department of Financial Services
North Carolina North Carolina Commissioner of Banks
North Dakota North Dakota Department of Financial Institutions
Ohio Ohio Department of Commerce
Oklahoma Oklahoma Banking Department
Oregon Oregon Division of Financial Regulation
Pennsylvania Pennsyvlania Department of Banking and Securities
Rhode Island Rhode Island Department of Business Regulation
South Carolina South Carolina Attorney General
South Dakota South Dakota Division of Banking
Tennessee Tennessee Department of Financial Institutions
Texas Texas Department of Banking
Utah Utah Department of Financial Institutions
Vermont Vermont Department of Financial Regulation
Virginia Virginia State Corporation Commission
Washington Washington State Department of Financial Institutions
West Virgnia West Virginia Division of Financial Institutions
Wisconsin Wisconsin Department of Financial Institutions
Wyoming Wyoming Division of Banking

Stablecoins Federal Guidelines

New York

California

Florida

  • OFR-560-01 – Application to Register as a Money Services Business
  • OFR-560-02 – Location Notification Form
  • OFR-560-03 – Declaration of Intent to Engage in Deferred Presentment Transactions
  • OFR-560-04 – Money Services Business Quarterly Report Form
  • OFR-560-05 – Pledge Agreement
  • OFR-560-06 – Money Services Business Surety Bond Form
  • OFR-560-07 – Security Device Calculation Form
  • Chapter 560, Florida Statutes – Money Services Businesses
  • Rule 69V-560, Florida Administrative Code – Money Transmitters
  • Form OFR-560-09 – Disciplinary Guidelines for Money Services Businesses
  • Security Device Calculation Form

 

Summary
Money Transmitter Licensing
Service Type
Money Transmitter Licensing
Provider Name
Dilendorf Law Firm,
60 Broad Street, 24th Floor,New York,New York-10004,
Telephone No.212.457.9797
Area
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Description
Money Transmitter Licensing - the state and federal licenses required to operate as a Money Services Business (MSB)

For more information about our money transmitter licensing services,

please contact Dilendorf Law Firm by sending an email or calling us at 212.457.9797

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