Washington D.C. Cryptocurrency Laws
Code of the District of Columbia 26-1001
“Money Transmitter” Definition
“Money transmission” means the sale or issuance of payment instruments or engaging in the business of receiving money for transmission or transmitting money within the United States, or to locations abroad, by any and all means, including but not limited to payment instrument, wire, facsimile, or electronic transfer. 26-1001
“Payment instrument” means any written or electronic check, draft, money order, travelers check, or other electronic or written instrument or order for the transmission or payment of money which is 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. 26-1001
(a) This chapter shall not apply to: (1) The United States or any department, agency, or instrumentality thereof; (2) The United States Post Office; (3) The District of Columbia government; (4) Banks, bank holding companies, credit unions, building and loan associations, savings and loan associations, savings banks, or mutual banks organized under the laws of any state, the District of Columbia or the United States; provided, that they do not issue or sell payment instruments through authorized delegates who are not banks, bank holding companies, credit unions, building and loan associations, savings and loan associations, savings banks, or mutual banks; or (5) The provision of electronic transfer of government benefits for any federal or District of Columbia governmental agency as defined in Federal Reserve Board Regulation E or by a contractor for and on behalf of the United States, or any department, agency or instrumentality thereof, or the District of Columbia government. (b) Authorized delegates of a licensee, acting within the scope of authority conferred by a written contract as described in § 26-1016 shall not be required to obtain a license pursuant to this chapter. 26-1003
Bond and Insurance Requirements
(a) Each application must be accompanied by a surety bond, irrevocable letter of credit, or such other similar security device acceptable to the Superintendent [Commissioner] in the amount of $50,000. If the applicant proposes to engage in business at more than one location, through authorized delegates or otherwise, then the amount of the security device will be increased by $10,000 per location. The maximum amount of the security device required for all locations shall not exceed $250,000. The security device shall be in a form satisfactory to the Superintendent [Commissioner] and shall run to the District of Columbia for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee in respect to the receipt, handling, transmission, or payment of money in connection with the sale and issuance of payment instruments or transmission of money. In the case of a bond, the aggregate liability of the surety shall not exceed the principal sum of the bond. Claimants against the licensee may themselves bring suit directly on the security device or the Superintendent [Commissioner] may, through the Office of the Corporation Counsel, bring suit on behalf of such claimants, either in one action or in successive actions. 26-1007
Bond Alternatives and Additional Insurance Requirements
(b)(1) In lieu of the security device, or of any portion of the principal thereof required by subsection (a) of this section, the licensee may deposit with the Superintendent [Commissioner], or with such banks in the District of Columbia as the licensee may designate and the Superintendent [Commissioner] may approve cash, interest-bearing stocks and bonds, notes, debentures or other obligations: (A) Of the United States; (B) Of any agency or instrumentality of the United States; (C) Guaranteed by the United States; (D) Of the District of Columbia; or (E) Guaranteed by the District of Columbia, in an aggregate amount, based upon the lower of principal amount or market value of not less than the amount of the security device or portion thereof. 26-1007
(a) Each licensee under this chapter shall at all times have a net worth of not less than $100,000, calculated in accordance with generally accepted accounting principles. Licensees engaging in money transmission at more than one location or through authorized delegates shall have an additional net worth of $50,000 per location or authorized delegate located in the District of Columbia, as applicable. The maximum net worth required for all locations shall not exceed $500,000. 26-1004 (a) Each licensee under this chapter shall 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 issued or sold by the licensee in the United States. This requirement may be waived by the Superintendent [Commissioner] if the dollar volume of a licensee’s outstanding payment instruments does not exceed the bond or other security devices posted by the licensee pursuant to § 26-1007. (b) Permissible investments, even if commingled with other assets of the licensee, shall be 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. 26-1005
Money Transmission License Required for Crypto Exchange?
Yes (Most Likely)
State Comments or Statements
The state does not define money and the term payment instrument is overly broad and could encompass virtual currencies. Until such time as the state takes a stance, we will have to assume that a license is required.