Representatives of the Pennsylvania’s Department of Banking and Securities, (DoBS) reported that crypto-exchangers and exchanges can work in a state without a license, as reported by the CoinDesk news agency.
On Wednesday, January 23, DoBS published a new guide for employees of the local crypto-industry, taking into account the disclosure of a number of nuances regarding building a business.
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Representatives of the department did not regard the cryptocurrency as cash. As stated in the DoBS report, the Money Transmission Business Licensing Law or the Money Transmitter Act of Pennsylvania does not apply to cryptocurrency platforms.
Cryptocurrencies and Pennsylvania Laws
According to state laws, only fiat currency or "non-fiat" funds issued by the US government can be considered money. "To date, no jurisdiction in the United States has defined virtual currency as legal tender." – from the DoBS message.
The law states that "parties that are building a money transfer business must obtain a license if they transfer the specified currency and must charge a transfer fee". However, since the crypto-exchangers "never work directly" with the fiat currency, and the transactions are carried out through a bank account, they are "not money senders" that require a license.
Other enterprises in the crypto-sector, such as crypto-ATMs, wallets and intermediaries, are also not the official money transfer.
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"Both in one-way and two-way Kiosk systems there is no transfer of money to third parties. The user simply exchanges the specified currency for virtual currency and vice versa, and no money transfers are made" – from the DoBS message.
In Pennsylvania, crypto-companies may operate without licensing, but the scenario may be different for firms dealing with ICOs at the federal level.
Editor: Yulia Krasnaya