Law Approved in North Carolina about Bitcoin Money Transferences.


The cryptocoins each day are more accepted by users, therefore, national, regional and local governments, which are empowered by law are in the need to issue all faithful compliance precepts for digital currencies operators, in this regard, the United States North Carolina State Government are taking the first steps to control this activity.

This article will be reviewed from Todd Bryant’s perspective and overview, in relation to the new provisions of the sanctioned recently in the State of North Carolina, called Money Transmitter act in Cryptocoins, it can be seen how it can affect the legal instrument about the companies which exchange bitcoin in the state.

In this regard, The North Carolina Money Transmitter Act, was expanded recently to cover traders working with Bitcoin, this now is called Bill 289, which was passed and signed in July 2016, by Governor Pat McCrory, is considered as the “Law of the virtual currency” with scope within the limits of the state, the bill introduces a legal framework to regulate bitcoin and blockchain technology.

For McCrory, legislation way had to go through a lengthy and elaborated period of discussion where the feedback from stakeholders should be included. The bill proyect is seen today as favorable by many for businesses, it is said that it brings clarity in the virtual currency’s field, in the State of North Carolina, others do not see it as excessive regulation. Moreover, the Chamber of Digital Commerce and other institutions contributed to add new ideas to the project.

It’s important to hightlight that The Money Transmitter Act, now enlarged, as Law 289, included a definition of virtual currency that says “A digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account, or a store of value but only to the extent defined as stored value under G.S. 53-208.42(19), but does not have legal tender status as recognized by the United States Government.” Naturally, this definition has been the first step towards regulating the virtual currency field in North Carolina.

It is evident, according to the law, the bitcoin traders will fall into the category of money transmitters and as such, they will have to obtain a license. There are a number of exempt options, such as being the agent of a payee, but they need to be duly demonstrated. On the other hand,  A license will not be needed from virtual currency miners, as well as blockchain software companies for a number of services such as smart contract platforms, smart property, multi-signature software and non-custodial and non-hosted wallets.

As for the process of licensing, is also defined in the Act, virtual currencies traders will have to follow the procedure established through the licensing system at national level. After fulfilling the requirements, they shall be authorized by the Commissioner banks North Carolina. Documents are: business entity paperwork, active money business services registration with the United States Department of Treasury Financial Crimes Enforcement Network, business plan, anti-money laundering program documents, and audited financial statements, among others.

Moreover, the minimum net worth for licensing is set at $250,000 and it should be kept at all times. the application fee is $ 1,500. There is also an annual fee of $ 5,000 assessment for transmission volumes below $ 1 million. The application fee is $1,500. There is also an annual assessment fee of $5,000 for transmission volumes below $1 million. Above that amount, the assessment fee is calculated as a percentage of the transferred volume on top of the basic annual assessment fee of $5,000.

It is important that there are new elements introduced with this addition to the act is the money transmitter bond licensing requirement for bitcoin traders. A type of surety bond is needed in order to bring up the level of security in the business. The function of the bond is to guarantee that bitcoin traders will handle their clients’ virtual currency assets according to the applicable laws applied by the State.

As for the guarantees, that traders must post depends on the amounts or volumes of money transfers, which are made annually. The standard bond requirement is $150,000 for money transmission volumes below $1,000,000. For volumes between $1,000,000 and $5,000,000, the bonding requirement is set at $175,000 as a requirement. The next level is set at $200,000 for traders with an yearly volume between $5,000,000 and $10,000,000 per year. For volumes between $10,000,000 and $50,000,000, the bond needs to be $225,000. Finally, if the transmission volume is above $50,000,000, the bond requirement is $250,000.

After the enactment of the Act, some consider that it is positive by the companies working with the transference of virtual money, on the other hand, legislators believe that the addition of bitcoin to the Money Transmitter Act is bound to bring the necessary level of regulation to virtual currencies and blockchain technology in North Carolina.


Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and / or services. This press release is for informational purposes information does not constitute investment advice or an offer to invest.

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