Delaware Cryptocurrency Laws

Relevant Statute

Delaware Code – Title 5 – Banking; Chapter 23. Sale of Checks and Transmission of Money; “The Sale of Checks Act”
5 Del. C. 1953, § 2301

Additional Definitions

“Check” means any check, draft, money order, personal money order or other instrument for the transmission or payment of money.

“Sell” means to sell, to issue, or to deliver a check.

“Deliver” means to deliver a check to the first person who in payment for same makes or purports to make a remittance of or against the face amount thereof, whether or not the deliverer also charges a fee in addition to the face amount, and whether or not the deliverer signs the check.
2302

Exemptions

(a) No license shall be required hereunder of banks, trust companies, credit unions, building and loan associations and savings and loan associations, organized under the laws of any state in the United States of America or the United States of America, which either are authorized to do business in this State, or which act through a contractor or agent authorized to do business in this State. (b) Nothing contained in this section or any other section of this chapter shall be construed to enlarge or limit the rights which any of the above-named organizations have under any existing law. (c) The Commissioner shall be authorized to exempt from any or all of the provisions of this chapter such persons or classes of persons, or checks or transmissions or classes of checks or transmissions, as the Commissioner shall find inappropriate to include within the coverage of this chapter in order to effectuate the purposes of this chapter. The Commissioner may by regulation establish procedures for application, fees and other requirements for an exemption pursuant to this subsection. 2304

Registration Fees

$172.50 Investigation Fee $230 Licensee Fee + $4.60 for each location in the State of the offices of the applicant

Bond and Insurance Requirements

(a) Surety bonds. — (1) Every licensee shall file with the Commissioner, in a form satisfactory to the Commissioner, an original corporate surety bond, with surety provided by a corporation authorized to transact business in this State, in the principal sum of $25,000 and in an additional principal sum of $5,000 for each location in excess of 1 at which the applicant proposes to conduct a business licensed by this chapter, but in no event shall the bond be required to be in excess of $250,000. (2) No bond shall be accepted unless the following requirements are satisfied: a. The term of the bond shall be commensurate with the license period or continuous; b. The expiration date of the bond shall not be earlier than midnight of the date on which the license expires; and c. The bond shall run to the State, for the benefit of the office of the State Bank Commissioner and for the benefit of all consumers injured by any wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the bond shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. Surety claims shall be paid to the office of the State Bank Commissioner by the insurer not later than 90 days after receipt of a claim. Claims paid after 90 days shall be subject to daily interest at the legal rate. The aggregate liability of the surety on the bond, exclusive of any interest which accrues for payments made after 90 days, shall in no event exceed the amount of such bond. 2309

Bond Alternatives and Additional Insurance Requirements

(b) Irrevocable letters of credit. — In lieu of requiring the filing of a surety bond, the Commissioner may, at the Commissioner’s discretion, accept from a licensee an irrevocable letter of credit. (1) Such irrevocable letter of credit shall be provided by an insured depository institution (as defined in the Federal Deposit Insurance Act at 12 U.S.C. § 1813(c)) acceptable to the Commissioner, in a form satisfactory to the Commissioner in the principal sum of $25,000 and in an additional principal sum of $5,000 for each location in excess of 1 at which the applicant proposes to conduct a business licensed by this chapter, but in no event shall such irrevocable letter of credit be required to be in excess of $250,000. (2) No irrevocable letter of credit shall be accepted unless the following requirements are satisfied: a. The irrevocable letter of credit shall run to the State, for the benefit of the office of the State Bank Commissioner and for the benefit of all consumers injured by the wrongful act, omission, default, fraud or misrepresentation by a licensee in the course of its activity as a licensee. Compensation under the irrevocable letter of credit shall be for amounts which represent actual losses and shall not be payable for claims made by business creditors, third-party service providers, agents or persons otherwise in the employ of the licensee. The aggregate liability of the insured depository institution issuing the irrevocable letter of credit shall in no event exceed the amount of such irrevocable letter of credit; and b. Draws upon such irrevocable letter of credit shall be available by sight drafts thereunder, in amounts determined by the Commissioner, up to the aggregate amount of the irrevocable letter of credit. Such drafts shall be paid in accordance with § 5-112(1) of Title 6. 2309

Capital Requirements

To qualify for a license hereunder an applicant shall meet the following requirements: (1) The applicant shall have a net worth of at least $100,000 computed according to generally accepted accounting principles. 2305

Money Transmission License Required for Crypto Exchange?

Yes (Likely)

State Comments or Statements

Money or payment instrument is not defined. When money is not defined, there is a reasonable assumption that virtual currencies are deemed money or otherwise used as medium of exchange. Until such time that the State or the courts of Delaware opine on this subject matter, we consider this to be a state that would likely require a money transmitter license.