South Carolina Cryptocurrency Laws

Relevant Statute

South Carolina Code of Laws; Title 35 – Securities; Chapter 11 – “South Carolina Anti-Money Laundering Act” Section 35-11-100

“Money” Definition

“Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments. 35-11-105

“Money Transmitter” Definition

“Money transmission” means selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission. The term does not include the provision solely of delivery, online or telecommunications services, or network access. 35-11-105

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. The term does not include a credit card voucher, letter of credit, or instrument that is redeemable by the issuer in goods or services. 35-11-105

Exemptions

This chapter does not apply to: (1) the United States or a department, agency, or instrumentality of the United States; (2) money transmission by the United States Postal Service or by a contractor on behalf of the United States Postal Service; (3) a state, county, city, or another governmental agency or governmental subdivision of a state; (4) a bank, bank holding company, office of an international banking corporation, branch of a foreign bank, corporation organized pursuant to the Bank Service Corporation Act, 12 U.S.C. Section 1861-1867 (Supp. V 1999), or corporation organized under the Edge Act, 12 U.S.C. Section 611-633 (1994 & Supp. V 1999), under the laws of a state or the United States if it does not issue, sell, or provide payment instruments or stored value through an authorized delegate who is not such a person; (5) 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 of the United States, or a state or governmental subdivision, agency, or instrumentality of a state; (6) a board of trade designated as a contract market under the federal Commodity Exchange Act, 7 U.S.C. Section 1-25 (1994), 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 a board of trade; (7) a registered futures commission merchant under the federal commodities laws to the extent of its operation as a futures commission merchant; (8) a person who provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from that registration granted under the federal securities laws to the extent of its operation as a provider of clearance or settlement services; (9) 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 clearing house transfers, similar funds transfers; (10) a person registered as a securities broker-dealer under federal or state securities laws to the extent of his operation as a securities broker-dealer; or (11) a credit union regulated and insured by the National Credit Union Association. 35-11-110

Registration Fees

$750 License/Registration Fee $1,500 Application Fee

Bond and Insurance Requirements

(A) Except as otherwise provided in subsection (B), a surety bond, letter of credit, or other similar security acceptable to the commissioner in the amount of fifty thousand dollars plus ten thousand dollars for each location, not exceeding a total addition of two hundred fifty thousand dollars, must accompany an application for a license. (B) Security must be in a form satisfactory to the commissioner and payable to the State for the benefit of a 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 may not exceed the principal sum of the bond. A claimant against a licensee may maintain an action on the bond, or the commissioner may maintain an action on behalf of the claimant. 35-11-215

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 a form prescribed by the commissioner. (F) The commissioner may increase the amount of security required to a maximum of one million dollars if the financial condition of a licensee so requires, as evidenced by reduction of net worth, financial losses, or other relevant criteria. 35-11-215

Capital Requirements

A person licensed pursuant to this article shall maintain a net worth of at least two hundred fifty thousand dollars determined in accordance with generally accepted accounting principles. 35-11-230

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”.

Notes

Approval to engage in money transmission when licensed in another state. (A) A person who is licensed to engage in money transmission in at least one other state, with the approval of the commissioner and in accordance with this section, may engage in money transmission and currency exchange in this State without being licensed pursuant to Section 35-11-205 if the: (1) state in which the person is licensed has enacted the Uniform Money Services Act or the commissioner determines that the money transmission laws of that state are substantially similar to those imposed by the law of this State; (2) person submits to, and in the form required by, the commissioner: (a) in a record, an application for approval to engage in money transmission and currency exchange in this State without being licensed pursuant to Section 35-11-205; (b) a nonrefundable fee of one thousand dollars; and (c) a certification of license history in the other state. (B) When an application for approval pursuant this section is complete, the commissioner shall promptly notify the applicant in a record, of the date on which the request was determined to be complete and: (1) the commissioner shall approve or deny the request within one hundred twenty days after that date; or (2) if the request is not approved or denied within one hundred twenty days after that date the: (a) request is approved; and (b) approval takes effect as of the first business day after expiration of the one hundred twenty-day period. (C) A person who engages in money transmission and currency exchange in this State pursuant to this section shall comply with the requirements of, and is subject to the sanctions provided in this chapter, as if the person were licensed pursuant to Section 35-11-220. 35-11-210