Shipkevich Bitcoin and ICO Attorney

Wyoming

Wyoming Money Transmitter License and Bitcoin

 

Who needs to register?

Under Wyoming statute, a person engaged in the business of money transmission who regularly advertises, offers or provides services to Wyoming residents through any medium including internet or electronic means.

Note: Wyoming has approved new legislation amending who is required to register for a money transmitter license. Effective July 1, 2013, under Wyoming statute, a person is engaged in the business of money transmission if the person advertises, offers or provides services to Wyoming residents, for personal, family or household use, through any medium including, but not limited to, internet or other electronic means.

 

Who is the regulator?

Wyoming Division of Banking

 

What are the money transmitter license requirements?

To apply as a money transmitter in the state of Wyoming requires the following fees and documentation:

  • Identifying and contact information and Federal EIN
  • Manager and/or officer in charge of Wyoming activities
  • Location of business records and phone number
  • 5 year history of criminal convictions and material litigation
  • Description of applicant activities, history of operations, and activities sought in Wyoming
  • List of proposed authorized delegates in Wyoming and all Wyoming locations
  • Sample authorized delegate contract
  • Sample form of payment instrument
  • Name and address of clearing bank on which payment instruments will be drawn or payable
  • List of states where applicant has been licensed and current status of such applicant including any denials, revocations or suspensions
  • Dollar amount and number of outstanding payment instruments as of June 30 the previous year in both the United States and Wyoming
  • List of type and amount of permissible investments
  • Name, addresses and five year employment history of executive officers, key shareholders, and officer/manager in charge of licensed activities
  • Five year history of criminal conviction sand material litigation for each executive officer and key shareholder
  • Net worth requirement of $25,000
  • The Commissioner may set an application fee of up to $3,000

Corporate money transmitter

If the applicant is a corporation, the applicant shall also provide:

  • The date of the applicant’s incorporation and state of incorporation
  • Certificate of good standing from the state in which the applicant was incorporated
  • Description of the corporate structure of the applicant, including identity of any parent or subsidiary of the applicant
  • Copy of the applicant’s most recent audited financial data including balance sheet, statement of income or loss, statement of changes in shareholder equity and statement of changes in financial position, and audited financial statements for preceding two years
  • SEC filings within one year of application
  • If a whole owned subsidiary, then the consolidated audited financial statements for current and previous two years or 10K for previous three years

General money transmitter

If the applicant is not a corporation, the applicant must provide:

  • Name, business, and residence address
  • Business structure and business address
  • Personal financial information for past five years
  • Employment history for the past five years of any other person or persons in charge of applicant’s licensed activities
  • Documents indicating place and date of registration of qualification to do business in Wyoming
  • History of material litigation for the five year period prior to the date of the application for each individual with ownership interest or supervisory responsibilities
  • Copies of the applicant’s audited financial statements including balance sheet, statement of income or loss and statement of changes in financial position for the current year and preceding two years

 

What are the general bonding requirements?

Money transmitters are required to have $10,000 in bond or the amount equivalent to the last 2.5 outstanding payments, whichever amount is greater. Bonds can amount no more than $500,000. The Commission has discretion to adjust the bonding requirement.

 

Bitcoin and Cryptocurrency

Bitcoin and other Virtual Currency entities are restricted and constrained by the Wyoming Money Transmitter Act of 2003. The Wyoming Division of Banking requires cryptocurrency operators and entities that offer Bitcoin wallets to obtain a Money Transmitter License. The Act requires regulated licensees to have in cash, CDs, Securities, or other “Permissive Investments” equal to the amount of money to be transferred digitally. This requires Cryptocurrency providers to have a back up of 100% of costumers’ Bitcoins in fiat currency, which digital currencies are not defined as “permissive investments,” therefore impractical and restrictive for virtual currency operators. A bill was drafted to define virtual currencies as permissive investments in September 26, 2016, but failed to pass.

Representative Lindholm explained the purposes of the two bill drafts and the current situation in the State regarding companies that offer a platform where persons can buy and use bitcoin. Albert Forkner, State Banking Commissioner and Joe Mulberry, Deputy Commissioner, Wyoming Division of Banking, commented on the bill drafts. Mr. Mulberry noted the purpose of the Wyoming Money Transmission Act was to regulate the business of money transmission. Mr. Mulberry explained the Act requires any person engaged in the business of money transmission to be licensed and to possess permissible investments to cover the value of outstanding obligations. Mr. Mulberry noted digital currency did not exist at the time of adoption of the Act but has since been interpreted to apply to the Act as “monetary value” which is defined as a means of medium of exchange whether or not redeemable in money. The Task Force generally discussed the need for enacting legislation at this time to address the issue of bitcoin. Mr. Forkner commented the Uniform Law Commission was currently drafting model language to regulate virtual currency. The Task Force took no action on the bill drafts.

Additional resources:

Wyoming Money Transmitters Act

17LSO-0138 WD0.3 – Wyoming Money Transmitter Act-investments. (Appendix 8).

17LSO-0139 WD0.3 – Wyoming Money Transmitter Act-digital currency amendments. (Appendix 9).

 

Disclaimer: Information provided by Shipkevich, PLLC and any of its affiliated web pages is for general educational purposes only, and should not be taken as legal advice.