[2015-10-01] US: Virtual Currency Businesses: An Analysis Of The Evolving Regulatory Landscape

[LiteCoinGuy]

Virtual Currency Businesses: An Analysis Of The Evolving Regulatory Landscape

I. INTRODUCTION

Whether virtual currency businesses boom or go bust remains to be seen. The jury is out on whether Bitcoin or some other digital currency garners widespread acceptance by merchants and consumers as a substitute for the U.S. dollar for the electronic payment of goods and services.

http://www.mondaq.com/unitedstates/x/43 ... +Landscape

[kelman]

Full version here: https://www.andrewskurth.com/media/arti ... J_2015.pdf

This provides a nice overview of the regulations governing virtual currency businesses in the US. Unfortunately it provides few solutions to operators in this space. Of interest is the discussion of the methods separate states use to define whether use of a virtual currency amounts to a "money transmission" requiring a money transmitter license.

The article provides useful advice for how to structure a business operating a bitcoin ATM in Texas. In short, using an ATM to onboard or offboard money to/from a bitcoin exchange is prohibited. Whether an ATM machine in Texas is a money transmitter (and hence needs to obtain a license) turns on the configuration of the machine—that is, whether the machine operates as an intermediary between a buyer and seller through an exchange site or whether the machine conducts the transaction directly between the customer and the machine’s operator. In the latter case, there would be no money transmission because “at no time is money received in exchange for a promise to make it available at a later time or different location.”