Cryptocurrency License in USA | Cryptocurrency exchange registration in USA

Cryptocurrency In USA

In the United States, crypto-currency regulation being started to come in the limelight at the legislative level in 2013 while the government made the verdict not to ban them, but somewhat to make a legal basis for their use. Cryptocurrency in the United States is considered as decentralized and they function the same way as a fiat currency. This means that exchanges and additional organizations experiencing operations with them are grateful:

To be listed as Money Services Businesses (financial services)

To obtain licenses for such activity (bitlicense, USA);

To notify law enforcement authorities of transactions affecting doubts.

Cryptocurrency taxation, which is identical to property taxes, is also keeping pace at the national level. Profits from operations connecting it are analyzed as capital gains profits and are taxed in the Internal Revenue Service of the USA. Violation of token placement regulation and crypto-currency exchange are considered by the SEC as criminal acts (in 2017 it already initiated the first case over an ICO swindle).

Characteristics of attaining Cryptocurrency Licensing in Different States

In the USA, cryptocurrency licenses are subjected by the national regulation bureau FinCEN. The institution issues permits which also permit for the ways of activities related to:

The provision of prepaid access and background checks;

Foreign exchange services;

The issue and sale of traveler's checks, money transfers and remittances;

Sales with prepaid access.

A cryptocurrency exchange license in the USA is given either on the national level, validity all through the whole country, or on the individual states level, applicable in those states only. In America, in case the company plans to do a greater amount of activity, a general permit is more suitable.

While working outside of the USA, a license which is applicable in one state is enough. It will offer the right to open the essential bank accounts and to perform the pertinent activities. The government fee for this is not constant and is distinct by the state authorities. In choosing the territory, companies must also deem:

Whether cryptocurrency licenses are offered there in general – the USA offers the right to regulation to state authorities; in the meantime, in New Mexico, South Carolina and Montana, for example, it is not offered for;
The essential amount of the authorized capital for the organization is being registered and attaining the license. This varies from Hawaii to Pennsylvania;
The least capital amount for developing and maintaining business. There must be the amount which has been decided by the regulation of USA on beneficiaries’ personal or corporate accounts (however, for example, in Georgia, this requirement does not exist);
Whatever profit tax rates ensuing from cryptocurrency operations are reputable in the state and so on.
License for cryptocurrency exchange in the USA permits its owners to work with exchange of cryptocurrencies. All applicants intending to offer payment services except crypto exchanges are interested to attain such license.
Licensing of cryptocurrency exchange itself is adequately patient process. We will deem everything in details below.

The status which is meant for those who aim to provide services on cryptocurrency exchange?

Possible license candidates aiming to operate the action on cryptocurrency exchange will be known as companies offering money transferring services (Money Service Business, MSB).

Which license is necessary for the MSB to function in a lawful way?

If the company aims to function as a mediator in transactions regarding exchange of cryptocurrencies to real funds (cryptocurrency - fiat), it is necessary to get the Money Transmitter License.

If the company choose to act as an mediator in transactions on exchange of one cryptocurrency to one more (cryptocurrency - cryptocurrency), it is necessary to get the MSB License and examine needs set by legislation of each state.

Which necessities are essential for the MSB to get the license for cryptocurrency exchange in the USA?

To get license for the cryptocurrency exchange, the potential exchangers must:

Pass the registration procedure in the United States Department of the Treasury (the registration should be extended every two years);
Give the list of their agents;
Inform about suspicious transactions;
Obey with the Anti-money laundering (AML) and the opposing of financing of terrorism (CFT) policy;
Description on transactions more than the amount of 10 thousand USD;
Uphold the information concerning money transfers;
Obey with rules on transferring funds;
Uphold records on currency exchange;
Uphold additional types of reports.
Non-residents of the US working on the activity of cryptocurrency exchange in the US must also fulfill with these rules.

What are the particularities of getting license for cryptocurrency exchange in the USA?

Documents of licensing of activity connected to cryptocurrency in the US are in the federal structure of the United States. Apart from requirements of the national regulator, almost each state sets its own needs. The final documentations may vary from each other. Therefore, if the crypto exchange aims to offer services on cryptocurrency exchange in various states, its actions will be accountable to licensing in each of these states.

For example, New York state needs to get special license called BitLicense to run activities connected to the cryptocurrency exchange.

However, until now not every States have lastly determined concerning their position in accordance to the exchange of cryptocurrencies. In addition, the situation of regulators has a propensity to alter from time to time.