Kentucky Cryptocurrency Laws
Kentucky Revised Statutes, KRS 286.11
“Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government or other recognized medium of exchange, including a monetary unit of account established by an intergovernmental organization or by agreement between two (2) governments.
“Money Transmitter” Definition
“Money transmission” means engaging in the business of receiving money or monetary value to transmit, deliver, or instruct to be transmitted or delivered, money or monetary value to another location inside or outside the United States by any and all means, including but not limited to wire, facsimile, electronic transfer, or issuing stored value. “Money transmitter” means a person that is engaged in money transmission.
“Monetary value” means a medium of exchange whether or not redeemable in money.
(a)”Payment instrument” means:
1. A check, draft, money order, traveler’s check, or other written or electronic instrument or order for the transmission or payment of money, sold or issued to one (1) or more persons, whether or not such instrument is negotiable; or
2. The purchase or the deposit of funds for the purchase of a check, draft, money order, traveler’s check, or other written or electronic instrument;
(b) “Payment instrument” does not include any credit card voucher, letter of credit, or instrument that is redeemable by the issuer in goods or services.
This subtitle does not apply to:
(1) The United States or any department, agency, or instrumentality thereof;
(2) The United States Post Office or a contractor acting on behalf of the United States Post Office;
(3) A state or any agency, department, or political subdivision of a state;
(4) A financial institution or its subsidiaries, affiliates, and service corporations, or any office of an international banking corporation, branch of a foreign bank, or corporation organized pursuant to the Bank Service Corporation Act, 12 U.S.C. secs. 181 to 1867, or a corporation organized under the Edge Act, 12 U.S.C. secs. 611 to 633;
(5) A service provider that:
(a) Pursuant to a written agreement, acts on behalf of an entity exempt from licensure as set forth in subsection (4) of this section; and
(b) Allows the state or federal regulators with regulatory jurisdiction over the exempt entity to examine and inspect the service provider’s applicable records, books, and transactions;
(6) A service provider that receives money or monetary value on behalf of an entity selling goods or services other than money transmission services if:
(a) The entity, upon receipt of funds by the service provider, immediately either:
1. Provides the purchased goods or services to the purchaser; or
2. Credits the purchaser for the full amount of money or monetary value received by the service provider, which credit is not revocable by the entity, and evidences this credit in writing; and
(b) The entity is obligated to provide the purchased goods or services to the purchaser regardless of whether or not the service provider transmits the money or monetary value to the entity; or
(7) The provision of electronic transfer of government benefits for any federal, state, or county governmental agency as defined in Federal Reserve Board Regulation E, by a contractor for and on behalf of the United States or any department, agency, or instrumentality thereof, or any state or any political subdivisions thereof.
$1,100 License cost including NMLS processing fee
Bond Alternatives and Additional Insurance Requirements
(1) Each application shall be accompanied by a surety bond or other similar security acceptable to the commissioner, in the amount of at least five hundred thousand dollars ($500,000). The commissioner may increase the amount of the surety bond, or other similar security, to a maximum of five million dollars ($5,000,000), upon the basis of the financial condition of an applicant, as evidenced by net worth, transaction volume, or other relevant criteria that the commissioner may establish by order or rule.
Each licensee under this subtitle shall at all times have a net worth of not less than five hundred thousand dollars ($500,000), calculated in accordance with generally accepted accounting principles. 286.11-011
(1) Every licensee shall, at all times, maintain permissible investments that have a market value that is computed in accordance with generally accepted accounting principles. These investments shall not be less than the aggregate amount of all outstanding payment instruments.
Except to the extent otherwise limited in subsection (5) of this section, the following investments are permissible for a licensee: (Please See https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40255)
Money Transmission License Required for Crypto Exchange?
State Comments or Statements
The money transmission definition includes the concept of monetary value, which is defined as a “medium of exchange, whether or not redeemable in money”.