North Dakota Cryptocurrency Laws

Relevant Statute

North Dakota Century Code Chapter 13-09; Money Transmitters

“Money Transmitter” Definition

“Money transmission” means to engage in the business of the sale or issuance of payment instruments, stored value, or of receiving money or monetary value for transmission to a location within or outside the United States by any and all means, including wire, facsimile, or electronic transfer. Notwithstanding any other provision of law, “money transmission” also includes bill payment services not limited to the right to receive payment of any claim for another, but does not include payment processing activities conducted for a merchant under an agency relationship. 13-09-02

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, traveler’s 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 that is redeemable by the issuer in goods or services. 13-09-02

Exemptions

This chapter does not apply to: 1. The United States or any department, agency, or instrumentality thereof; 2. The United States post office; 3. The state or any political subdivisions thereof; 4. Banks, bank holding companies, credit unions, building and loan associations, savings and loan associations, or savings banks or mutual banks organized under the laws of any state or the United States, but this exemption does not extend to any other person acting on behalf of any such excluded entity; 5. 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; and 6. Authorized delegates of a licensee, acting within the scope of authority conferred by a written contract as described in section 13-09-15. 13-09-03

Registration Fees

$450 Application Fee $400 License Fee

Bond and Insurance Requirements

Each application must be accompanied by a surety bond, irrevocable letter of credit, or such other similar security device, hereinafter “security device”, acceptable to the commissioner in the amount of one hundred fifty thousand dollars. The commissioner may increase the amount of the bond or security device to a maximum of five hundred thousand dollars for good cause. The security device must be in a form satisfactory to the commissioner and must run to the state for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission, and payment of money in connection with the sale and issuance of payment instruments and transmission of money. In the case of a bond, the aggregate liability of the surety may not exceed the principal sum of the bond. Claimants against the licensee may themselves bring suit directly on the security device or the commissioner may bring suit on behalf of such claimants, either in one action or in successive actions. 13-09-05

Bond Alternatives and Additional Insurance Requirements

In lieu of a security device or of any portion of the principal thereof, as required by this section, the licensee may deposit with the commissioner, or with banks in this state as the licensee may designate and the commissioner may approve, cash, interest-bearing stocks and bonds, notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, or guaranteed by the United States, or of this state, or of a city, county, school district, or instrumentality of this state, or guaranteed by this state, to an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the security device or portion thereof. The securities and cash must be deposited as aforesaid and held to secure the same obligations as would the security device, but the depositor is entitled to receive all interest and dividends thereon, with the approval of the commissioner may substitute other securities for those deposited, and must be required so to do on written order of the commissioner made for good cause shown. 13-09-05

Capital Requirements

Each licensee under this chapter must at all times have a net worth of not less than one hundred thousand dollars, calculated in accordance with generally accepted accounting principles. 13-09-04 1. Each licensee under this chapter must at all times possess permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate face amount of all outstanding payment instruments and stored value issued or sold 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 instruments and stored value does not exceed the bond or other security devices posted by the licensee pursuant to section 13-09-05. 2. Permissible investments, even if commingled with other assets of the licensee, are deemed by operation of law to be held in trust for the benefit of the purchasers and holders of the licensee’s outstanding payment instruments in the event of the bankruptcy of the licensee. 13-09-06

State Comments or Statements

A FAQ on the ND Dept of Financial Insitutions website states that “Currently, the Department does not consider the control or transmission of virtual currency to fall under the scope of NDCC 13-09. However, any such company that also holds or transmits fiat currency will still need to secure a money transmitter license.” North Dakota attempted to pass bill ND 2100 which would enact a legislative management study of virtual currency, but the bill failed to pass. https://legiscan.com/ND/text/2100/2017