New Mexico Cryptocurrency Laws

Relevant Statute

New Mexico Uniform Money Services Act 58-32-101

“Money” Definition

“Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. “Money” includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. 58-32-102

“Money Transmitter” Definition

“Money transmission” means selling or issuing payment instruments, stored value or receiving money or monetary value for transmission. “Money transmission” does not include the provision solely of delivery, online or telecommunications services or network access. 58-32-102

Additional Definitions

“Monetary value” means a medium of exchange, whether or not redeemable in money. “Payment instrument” means a check, draft, money order, traveler’s check or other instrument for the transmission or payment of money or monetary value, whether or not negotiable. “Payment instrument” does not include a credit card voucher, letter of credit or instrument that is redeemable by the issuer in goods or services. 58-32-102

Exemptions

The Uniform Money Services Act does not apply to: A. the United States or a department, agency or instrumentality thereof; B. money transmission by the United States postal service or by a contractor on behalf of the United States postal service; C. a state, county, city or any other governmental agency or governmental subdivision of a state; D. a bank, bank holding company, office of an international banking corporation, branch of a foreign bank, corporation organized pursuant to the federal Bank Service Company Act or corporation organized pursuant to the federal Edge Act; E. electronic funds transfer of governmental benefits for a federal, state, county or governmental agency by a contractor on behalf of the United States or a department, agency or instrumentality thereof, or a state or governmental subdivision, agency or instrumentality thereof; F. a board of trade designated as a contract market pursuant to the federal Commodity Exchange Act or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for such a board; G. a registered futures commission merchant under the federal commodities laws to the extent of its operation as such a merchant; H. a person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from such registration granted under the federal securities laws to the extent of its operation as such a provider; I. an operator of a payment system to the extent that it provides processing, clearing or settlement services, between or among persons excluded by this section, in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearinghouse transfers or similar funds transfers; J. a person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as such a broker-dealer; K. an attorney or title company that, in connection with a real property transaction, receives and disburses domestic currency or issues an escrow or trust fund check only on behalf of a party to the transaction; L. a credit union regulated and insured by the national credit union association; or M. any other person, transaction or class of persons or transactions exempted by the director’s rule or any other person or transaction exempted by the director’s order pursuant to a finding that the licensing of the person or transaction is not necessary to achieve the purposes of the Uniform Money Services Act. 58-32-103

Registration Fees

$2,000 Application Fee $2,000 License Fee

Bond and Insurance Requirements

A. Except as otherwise provided in Subsection B of this section, a surety bond, letter of credit, or other similar security acceptable to the director shall accompany an application for a license pursuant to Article 2 [58-32-201 through 58-32-206 NMSA 1978] of the Uniform Money Services Act. Except as otherwise provided in Subsections D and F of this section, the required security shall be in the amount of three hundred thousand dollars ($300,000) or an amount equal to one percent of the licensee’s total yearly dollar volume of money transmission business in this state or the applicant’s projected total volume of business in this state for the first year of licensure, whichever is greater, up to a maximum of two million dollars ($2,000,000). B. The security shall be in form and substance and from an issuer satisfactory to the director and payable to New Mexico for the benefit of any claimant against the licensee to secure the faithful performance of the obligations of the licensee with respect to money transmission. C. The aggregate liability on a surety bond shall not exceed the principal sum of the bond. A claimant against a licensee may maintain an action on the bond or the director may maintain an action on behalf of the claimant. 58-32-203

Bond Alternatives and Additional Insurance Requirements

E. In lieu of the security prescribed in this section, an applicant for a license or a licensee may provide security in form and substance and from an issuer prescribed by the director. F. The director may increase the amount of security required to a maximum of five million dollars ($5,000,000) if the financial condition of a licensee so requires, as evidenced by reduction of net worth, financial losses or other relevant criteria. 58-32-203

Capital Requirements

A licensee pursuant to Article 2 [58-32-201 through 58-32-206 NMSA 1978] of the Uniform Money Services Act shall maintain a net worth of at least the following amounts determined in accordance with generally accepted accounting principles: A. for one to four locations of the licensee and authorized delegates in New Mexico, one hundred thousand dollars ($100,000); and B. for five or more locations of the licensee and authorized delegates in New Mexico or for an internet-based money services business, five hundred thousand dollars ($500,000). 58-32-206

Money Transmission License Required for Crypto Exchange?

Yes

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”. Additionally, the New Mexico Regulation and Licensing Department states as follows on its website : “Q: Are virtual currency exchanges or other businesses engaged in the exchange of crypto currency for monetary value required to be licensed as a money service business? Yes, pursuant to the definitions of “money”, “monetary value”, “money transmission”, ”payment instrument”, “stored value” and “internet-based money services business” as contained within the Uniform Money Services Act §58-32-102 NMSA 1978, it is the position of the New Mexico Financial Institutions Division that any entity engaged in the business of providing the exchange of virtual currency for money or any other form of monetary value or stored value to persons located in the State of New Mexico must be licensed by the FID as a money transmitter.” http://www.rld.state.nm.us/financialinstitutions/faq-s.aspx