Kansas Cryptocurrency Laws

Relevant Statute

Kansas Money Transmitter Act; K.S.A. 9-508 – K.S.A. 9-513e

“Money Transmitter” Definition

“Money transmission” means to engage in the business of the sale or issuance of payment instruments or of receiving money or monetary value for transmission to a location within or outside the United States by wire, facsimile, electronic means or any other means, except that money transmission does not include currency exchange where no transmission of money occurs.

Additional Definitions

“Monetary value” means a medium of exchange, whether or not redeemable in money. “Payment instrument” means any electronic or written check, draft, money order, travelers check or other electronic or written instrument or order for the transmission or payment of money, sold or issued to one or more persons, whether or not such instrument is negotiable. The term ‘‘payment instrument’’ does not include any credit card voucher, any letter of credit or any instrument which is redeemable by the issuer in goods or services.


The following persons shall be exempt from the provisions of this act:
(a) (1) Banks, building and loan associations, savings and loan associations, savings banks or credit unions, organized under the laws of and subject to the supervision of this state, another state or the United States;
(2) service providers that: (A) By written agreement with the exempt entities listed in (a)(1), provide for receipt and delivery of funds, network access, processing, clearance or settlement services in support of money transmission activities; and (B) allow the state or federal regulators with regulatory jurisdiction over the exempt entity to examine and inspect the applicable records, books and transactions relating to the service provider;
(3) the government of the United States and its agencies, including agents of the government and its agencies; or
(4) the state of Kansas and its agencies, including agents of the state of Kansas and its agencies.
(b) This act also shall not apply to the distribution, transmission or payment of money as a part of the lawful practice of law, bookkeeping, accounting or real estate sales or brokerage or as an incidental and necessary part of any lawful business activity.

Registration Fees

$1,750 Application Fee

Bond and Insurance Requirements

(e) In addition, each person submitting an application shall meet the following requirements: … (3) in lieu of the deposit of cash or securities required by this subsection, such person may give a surety bond in an amount equal to that required for the deposit of cash or securities, in a form satisfactory to the commissioner and issued by a company authorized to do business in this state, which bond shall be payable to the office of the state bank commissioner and be filed with the commissioner; and (4) such person shall submit a list to the commissioner of the names and addresses of other persons who are authorized to act as agents for transactions with Kansas residents.

Capital Requirements

(e) In addition, each person submitting an application shall meet the following requirements:
(1) The tangible net worth of such person shall be at all times not less than $250,000, as shown by an audited financial statement and certified to by an owner, a partner or officer of the corporation or other entity filed in the form and manner prescribed by the commissioner. A consolidated financial statement from an applicant’s holding company may be accepted by the commissioner. The commissioner may require any person to file a statement at any other time upon request.
(2) such person shall deposit and at all times keep on deposit with a bank in this state approved by the commissioner, cash or securities satisfactory to the commissioner in an amount not less than $200,000. The commissioner may increase the amount of cash or securities required up to a maximum of $1,000,000 upon the basis of:
(A) The volume of money transmission business transacted in this state by such person; or
(B) the impaired financial condition of a licensee, as evidenced by a reduction in net worth or financial losses;

Each licensee under this act shall at all times possess permissible investments having an aggregate market value, calculated in accordance with United States generally accepted accounting principles, of not less than the aggregate amount of the outstanding payment liability held by the licensee in the United States. This requirement may be waived by the commissioner if the dollar volume of a licensee’s outstanding payment liability does not exceed the bond or other security devices posted by the licensee pursuant to K.S.A. 9-509, and amendments thereto.

State Comments or Statements

“The act of two-party currency exchange by itself is not covered by the KMTA regardless of whether it is sovereign currency being exchanged or virtual currency. Further, it is not regulated by the OSBC. However, the presence of a third party involved in a currency exchange transaction, will likely subject the transaction to the KMTA as “money transmission” and is discussed further below.”

Therefore, because cryptocurrencies as currently in existence are not considered “money” or “monetary value” by the OSBC, they are not covered by the KMTA. Since the KMTA does not apply to transmission of decentralized cryptocurrencies, an entity engaged solely in the transmission of such currency would not be required to obtain a license in the State of Kansas. However, should the transmission of virtual currency include the involvement of sovereign currency in a transaction, it may be considered money transmission depending on how such transaction is organized.”

“Exchange of cryptocurrency for sovereign currency through a third party exchanger is generally considered money transmission.”