On January 1, 2023, updates to virtual currency and money transmission laws went into effect.
Alaska’s money transmission regulations have been amended to include virtual currency in the scope of money transmission activity that is subject to regulation. Starting January 1, 2023, businesses involved in virtual currency money transmission to, from, or within Alaska will need to obtain an Alaska money transmission license. The amended regulations also state that virtual currency is a permissible investment, but only up to the amount of a licensee’s virtual currency obligations to its customers (such as virtual currency held on behalf of customers).
- Virtual currency is now included in the scope of money transmission activity that is subject to regulation in Alaska.
- As of January 1, 2023, companies engaged in virtual currency money transmission to, from, or within Alaska will need to obtain an Alaska money transmission license.
- Virtual currency is now considered a permissible investment, but only in relation to a licensee’s virtual currency obligations to its customers (e.g. virtual currency held on behalf of customers).
- The definition of “monetary value” has been expanded to include virtual currency and a definition of virtual currency has been added. The definition of virtual currency includes “a digital representation of value that is used as a medium of exchange, unit of account, or store of value; and is not money, whether or not denominated in money.” The definition excludes affinity and rewards programs and digital tokens related to online games, provided that certain criteria are met. Companies that engage in any activities involving virtual currency in Alaska will need to determine if those activities, if involving fiat money, would fall under the scope of activity subject to regulation under the Alaska money transmission law.
- The DBS had previously determined it did not have the jurisdiction to regulate virtual currency activity under its money transmission statute.
- Companies that engaged in virtual currency activity were required to obtain an Alaska money transmission license and enter into a Limited Licensing Agreement (LLA) with the DBS.
- The LLA required licensees to state that their license did not cover the transmission of virtual currency.
- The DBS is phasing out the LLA requirement and voiding LLAs.
- Companies previously concluding they did not need an Alaska money transmission license for virtual currency activity will need to reevaluate their compliance position when the new rule.
Effective January 1, 2023, Florida’s money services business laws defining “virtual currency,” now require licensure for anyone who sells or issues payment instruments or acts as a money transmitter. There are a few licensing exceptions:
- A money transmitter license is only required for persons acting as intermediaries between two parties if the intermediary has the ability to execute or prevent a transaction.
- Principal-to-principal, bilateral transactions are not subject to licensing.
- requirement of no longer requires money services business licensing for direct virtual currency purchase/sale transactions between two parties, but does require licensing for intermediaries in connection with virtual currency transactions
- The law defines “virtual currency” as a medium of exchange in electronic or digital format that is not currency, but excludes certain types of media of exchange.
- amends the definition of “money transmitter” to include “virtual currency” and cover intermediaries that have the ability to unilaterally execute or indefinitely prevent a transaction.
- Revises the definition of “payment instrument” to exclude virtual currency and clarify that it refers to an instrument used for the transmission, exchange, or payment of currency or monetary value, but is not the currency or monetary value itself
- Excludes virtual currency from the definition of “monetary value.”
- Amends the definition of “electronic instrument” to exclude virtual currency and the definition of “stored value” to exclude virtual currency.