Obtaining Money Transmitters License in USA. Not an easy way..

The intended use of Money Transmitters License Money Transmitters are normally required to obtain an appropriate license to…

The intended use of Money Transmitters License

Money Transmitters are normally required to obtain an appropriate license to operate in the United States. But there is no single way to obtain the Money Transmitters License in the United States, just like there is no single body issuing them.

These Licenses are issued by the local authorities of each state as well as by a special bureau of the U.S. Treasury Department – The Financial Crimes Enforcement Network (FinCEN).

For carrying out activities related to money transmits companies must obtain the license in each state, and in addition – the FinCEN license. This license is aimed at combating money laundering, and compliance with its conditions is controlled by the Internal Revenue Service (Bureau of the U.S. Treasury Department).

The conditions for obtaining it may differ depending on the state. Each state has its own legal act that regulates this licensing, as well as the authority that issues these licenses (Department of Business Oversight, Department of Banking, Department of Insurance, Securities and Banking, Department of Finance and others).

Who needs the Money Transmitters License?

This license is required for any money transmitter businesses or money orders, traveler’s checks, check cashing, currency dealing or currency exchange for a total amount of more than $ 1,000 per person.

Customers’ personal data protecting is above all

It is important to protect the personal data of users of companies providing money transfer services. It is regulated by the relevant federal legislation. In addition to personal data confidentiality it is necessary to provide the clients with details about information that can be shared with other entities.
Upon obtaining a license, the licensee must demonstrate the ability to fulfill these requirements. The Consumer Financial Protection Bureau and the Federal Trade Commission (depending on the size of the licensee) oversee the fulfillment of certain obligation.

Features of obtaining a license

It’s efficient first of all to obtain a FinCEN license and then – a state license. To this end, a legal entity is created in the selected state and there must be an experienced employee for overseeing the operations and anti-money laundering compliance. Also, it is necessary to demonstrate the proven procedure to combat money-laundering as well as to prove the effectiveness of this procedure.
Bear in mind that in the U.S. each state has its own requirements for obtaining this kind of license and its own issuance authority. The Conference of State Bank Supervisors has implemented an online portal for applications to dozens of states to simplify the application mechanism.

Most states require to prove the high financial ability of licensees. At the same time, the budget requirements differ depending on the state (for example, $ 250,000 in California, $ 500,000 in New York).

The process of obtaining a Money Transmitters License in the USA is lengthy and can take several years.

Is Money Transmitters License necessary for crypto-currency activity?

There is no unified definition of Bitcoin in the USA, so the need to obtain this license depends on the Bitcoin interpretation of the law as “currency” or “commodity”. In states where Bitcoin is recognized as a “currency” (for example, Florida) obtaining the Money Transmitters License is difficult.
FinCEN interpreted the conversion of the crypto currency in dollars as the transfer of money. Accordingly, the Money Transmitters License is necessary.

But do not be afraid of the consequences of not knowing all aspects of obtaining the Money Transmitters License in the USA.

Soon we will issue new article about obtaining bitlicense in USA. Keep on read us..

A team of SBSB professionals will take on all the organizational aspects. You only need to choose a state.

We have been advising our clients in the field of corporate law, international tax planning, finance, international licensing and integrated business support in more than 40 countries for more than five years. We will be glad to help you.

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