If a State or Federal regulator cannot find an exact way to pin this marketplace down, then they go after intent. Barring the problem the marketplace will face with respect to trust, etc. let us look at the intent. The intent will clearly how that without the market place, the transaction cannot take place. How […]
Is a bitcoin wallet like blockchain.info is a money transmitter as they are sending the transaction on your behalf. Also, that goes for any wallet company based in the USA. Is this true?
The answer is, it depends. In the case of Blockchain.info they are not classified as an MSB, because they do not have access to your funds. In their legal description they claim: 5.1.1 The Wallet is provided to you exclusively by Blockchain Luxembourg S.A. At no point will Blockchain ever take custody or control over […]
If I receive money on behalf of another person to make a purchase online for them, am I a money transmitter? I am in the US receiving dollars to make purchase online on behalf of a person living outside of the US.
This comes under the Agent of Payee exemption and as such, IIRC only 12 or 13 US States recognize this exemption. Other States don’t provide an exemption, so you need a money transmitter licenses for those states.
Do I need a money transmitter license if I receive money on behalf of a person in another country (e.g., Ghana)? I make a pay out to this person in Ghana at the end of every month. This arrangement prevents excessive microtransaction fees.
This makes you an intermediary, when you cited on behalf of a person, implies you are neither the owner of the transaction, nor the recipient and hence this makes you an intermediary, and where ever you go, in most countries this would classify you as a money transfer business and thus require you to get licensed.
Are you considered a money transmitter if your end users sends you their private keys to send funds on their behalf?
It depends. Typically as a money transmitter, you are neither the owner of the transaction nor the beneficiary. You are acting as an intermediary. Whether the funds are pushed to you, or the funds are pulled by you, via authorization, the fact remains the same, you are acting as an intermediary to execute the transaction. […]
Is Ripple a money transmitter under the FinCEN regulation? Do they have a money transmitter license?
In 2015, FinCEN fined Ripple for acting as a money transmitter and also violating various sections of the BSA (Bank Secrecy Act). WASHINGTON, DC – The Financial Crimes Enforcement Network (FinCEN), working in coordination with the U.S. Attorney’s Office for the Northern District of California (USAO-NDCA), assessed a $700,000 civil money penalty today against Ripple Labs Inc. and […]
Are payroll service providers considered to be money transmitters/money service businesses? And if not, why?
Originally, payroll companies did not need to be licensed. That is how the bulk of them operated. 100s of companies processed funds on behalf of their customers and no money transmitter licenses were required of them. However, if we look at the flow of funds, if funds are processed through them, then yes, they are […]
Would it be legal in the US for a business to effectively create their own currency in which all of their products must be bought? Anyone who wanted to buy anything would exchange the USD to the store currency. There would be no exchange fee.
Yes. This would be legal, but then again, IANAL (I am not a lawyer). If you replace the word ‘currency’ here with the word ‘store-credits’ or ‘loyalty-points’ the whole scenario doesn’t look so bad after all. The condition here would be that the issuer of this currency, i.e. you, can issue the currency (as much […]
Is a Money Service Business that is exempted from money transmission license requirement required to be licensed in all US states or is FinCEN registration sufficient?
If you are an MSB that is exempt from MTLs – that exemption would apply on a state by state basis. So for the states you are exempt, you are exempt, but others may require you to obtain a license. As far as FinCEN registration is concerned, if you are deemed to be an MSB, […]
Will an app that allows people send money internationally be disruptive? This app allows users become their own money transmitters by personally exchanging currencies with other money senders, eliminating the need for money transmitters.
There are various ways of looking at it, rather than just the money transmission angle. State regulators or federal regulators will look at the intent of your app. Some pertinent questions are: Does your app facilitate the transactions? Yes! Can the marketplace charge a fees for such a facilitation? Yes! Does the app aid in the transfer of money […]