Abstract
We proceed with a review of all of the states and their endeavors to deal with the latest innovative technologies. We note that states have many varying views concerning whether to regulate, the websites to warn inhabitants of the risks of virtual currency investments, whether to tax transactions, or even welcome their advent viewing the innovations as a further major step towards an increase in safety, lower costs, and other advantages. Some states license virtual currency businesses, others are content to simply warn of their risks, while other states appear to almost ignore the developments.
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Notes
- 1.
For an excellent summary of the laws and regulations pertaining to virtual currencies or the lack thereof, see Carlton Fields, Matthew Kohen, and Justin Wales, State Regulations On Virtual Currencies and Blockchain Technologies, Nov. 10, 2017, https://www.jdsupra.com/legalnews/state-regulations-on-virtual-currency-14945/
- 2.
State Survey on the Treatment of Virtual Currency, https://advance.lexis.com/open/document/lpadocument/?pdmfid=1000522&crid=13b9c497-adf7-4e02-b764-76be211e569b&pddocfullpath=%2Fshared%2Fdocument%2Fforms%2Furn%3AcontentItem%3A5FV2-K6T1-JFSV-G1GF-00000-00&pddocid=urn%3AcontentItem%3A5FV2-K6T1-JFSV-G1GF-00000-00&pdcontentcomponentid=102984&pdteaserkey=sr0&ecomp=5vkg&earg=sr0&prid=66adc6fe-f905-4247-96b9-525fa86b58a6
- 3.
The review relies heavily on the analysis of Thomas Brown, 50-STATE-SURVEY: Money Transmitter Licensing Requirements, http://abnk.assembly.ca.gov/sites/abnk.assembly.ca.gov/files/50%20State%20Survey%20-%20MTL%20Licensing%20Requirements%2872986803_4%29.pdf and Latham & Watkins’ The Other Side of the Coin: Bitcoin, Blockchain, Regulation & Enforcement, FIA, Mar. 24, 2016, https://lc.fia.org/sites/default/files/LW_2016%20FIA%20Bitcoin%20Webinar%20Presentation.pdf
- 4.
Alabama Money Transmission Act, H.B. 215, 2017 Leg., Reg. Sess. (Ala. 2017) §8-7A-2(8).
- 5.
Cal. Stat. §320.6.
- 6.
Cal. Assembly Bill AB-1123, Virtual Currency: Regulation (Feb. 17, 2017), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1123
- 7.
Conn. Pub. Act 15-53, An act Concerning Mortgage Correspondent Lenders, The Small Act, Virtual Currencies and Security Freezes on Consumer Credit Reports, Sec. 7(7)(c)((d), https://www.cga.ct.gov/2015/ACT/PA/2015PA-00053-R00HB-06800-PA.htm
- 8.
Georgia Department of Banking and Finance, Consumer and Investor Guidance on Virtual Currency, April 30, 2014, https://dbf.georgia.gov/sites/dbf.georgia.gov/files/related_files/document/consumer-advisory-virtual-currencies.pdf
- 9.
Ga. Code Ann. §7-1-680(26), discussed in Justin S. Wales and Matthew E. Kohen, State Regulations on Virtual Currency And Blockchain Technologies, Oct. 17, 2017, https://www.carltonfields.com/state-regulations-on-virtual-currency-and-blockchain-technologies-10-17-2017/. This article was also used as a source for discussion of the laws and regulations governing virtual currencies among the 50 states.
- 10.
Idaho Department of Finance, Idaho Money Transmitters Section, http://www.finance.idaho.gov/MoneyTransmitter/MoneyTransmitter.aspx
- 11.
An Act relating to electronic transactions; recognizing blockchain technology as a type of electronic record for the purposes of the Uniform Electronic Transactions Act; prohibiting a local government from taxing or imposing restrictions upon the use of a blockchain; and providing other matters properly relating thereto. SB 398, June 5, 2017, https://www.leg.state.nv.us/App/NELIS/REL/79th2017/Bill/5463/Overview
- 12.
Stan Higgins, Nevada Becomes First US State to Ban Blockchain Taxes, CoinDesk, June 6, 2017, https://www.coindesk.com/nevada-first-us-state-ban-blockchain-taxes/
- 13.
New York Statutes. Title 23, Ch. 1, Part 200, Virtual Currencies, http://www.dfs.ny.gov/legal/regulations/adoptions/dfsp200t.pdf
- 14.
Id. Part 200.2(q).
- 15.
Taken from the recitation by the court in Chino v. New York Dept. of Financial Services , 2017 NY Slip Op 51908, NY: Supreme Court 2017, https://scholar.google.com/scholar_case?case=15872102065273065030. The regulation is 23 NYCRR §§200.7–200.22.
- 16.
New York State Department of Financial Services, NYDFS Grand First Charter to a New York Virtual Currency Company (May 7, 2017), Press Release, http://www.dfs.ny.gov/about/press/pr1505071.htm
- 17.
New York State Department of Financial Services, NYDFC Announces Approval of First BitLicense Application From a Virtual Currency Firm, Sept. 22, 2015, Press Release, http://www.dfs.ny.gov/about/press/pr1509221.htm
- 18.
Chino v. Dept. of Financial Services, Claim No. 124835, Index No. 101880-15 (NY Ct. Cl., 2015), http://vertumnus.courts.state.ny.us/claims/html/2015-049-021.html
- 19.
Michael del Castillio, Bitcoin Exchange Coinbase Received New York BitLicense, Coindesk, Jan. 17, 2017, https://www.coindesk.com/bitcoin-exchange-coinbase-receives-bitlicense/
- 20.
Daniel Roberts, Behind the “exodus” of bitcoin startups from New York, Aug. 14, 2015, Fortune, http://fortune.com/2015/08/14/bitcoin-startups-leave-new-york-bitlicense/
- 21.
The North Carolina Money Transmitters Act, N.C. Gen. Stat. §53-208.1, et seq. §53-208.43 and §53-208.47, https://www.nccob.org/Public/financialinstitutions/mt/mtrules.aspx
- 22.
Texas Department of Banking, Supervisory Memorandum – 1037, April 3, 2014, http://www.dob.texas.gov/public/uploads/files/consumer-information/sm1037.pdf
- 23.
Texas Money Services Act, Ch. 1099 (H.B. 2218), Sec. 1, eff. September 1, 2005.
- 24.
Vermont statutes, Title 12, Ch. 081, §1913.
- 25.
Josh Garcia, Vermont changes money transmitter law to formally include virtual currency, Cooley Fintech, May 8, 2017, https://fintech.cooley.com/2017/05/08/vermont-changes-money-transmitter-law-to-formally-include-virtual-currency/
- 26.
Virginia State Corporation Commission, Notice to Virginia Resident Regarding Virtual Currencies, https://www.scc.virginia.gov/bfi/files/virtcur.pdf, citing Chapter 19 of Title 6.2 of the Code of Virginia (Money Order Sellers and Money Transmitters), §6.2-1900, et seq.
- 27.
An Act Addressing licensing and enforcement provisions applicable to money transmitters and currency exchanges under the uniform money services act, §3, Wa SB 531, eff. July 31, 2017, https://legiscan.com/WA/drafts/SB5031/2017
- 28.
Wy Stat §40-22-107 (1997 through Reg Sess), https://law.justia.com/codes/wyoming/2011/title40/chapter22/section40-22-107/
- 29.
An Act amending Section 44-7003, Arizona Revised Statutes by amending Article 5 relating to electronic transactions, HB2417, signed into law March 29, 2017, https://legiscan.com/AZ/text/HB2417/id/1497439
- 30.
An Act to Amend Title 8 of the Delaware Code Relating to the General Corporation Law, signed into law on July 21, 2017, https://legis.delaware.gov/BillDetail/25730
- 31.
John Roberts, Companies Can Put Shareholders on a Blockchain Starting Today, Fortune, Aug. 1, 2017, http://fortune.com/2017/08/01/blockchain-shareholders-law/
- 32.
Florida Money Laundering Act, Fl. Stat. §896.101(j), http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0800-0899/0896/0896.html
- 33.
Hawaii-2017, https://legiscan.com/HI/text/HB1481/2017
- 34.
Hawaii Sen. Bill No. 3082, eff. July 1, 2018, https://www.capitol.hawaii.gov/session2018/bills/SB3082_.HTM
- 35.
Jamie Redman, Hawaii’s New Money Transmitters Act Will Require Virtual Currency Licenses, bitcoin.com Jan. 31, 2018, https://news.bitcoin.com/hawaiis-new-money-transmitters-act-will-require-virtual-currency-licenses/, and Kevin Helms, Coinbase Exits as Hawaii Requires Bitcoin Companies to Hold Fiat Reserves, bitcoin.com, (Feb. 28, 2017), https://news.bitcoin.com/coinbase-exits-as-hawaii-requires-money-transmitter-license/
- 36.
Illinois Transmitters of Money Act, 205, ILC§6571, http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1201&ChapterID=20
- 37.
Id., 205 ILCS 605/10, P.A. 88-643, eff. 1-1-95.
- 38.
Justin Marble, Massachusetts Announces ICO Sweep (Dec. 18, 2017), Foley Hoag, http://www.foleyhoag.com/our-firm/technology-and-entrepreneurship/insights/2017/massachusetts-announces-ico-sweep
- 39.
In re Caviar and Kirill Bensonoff, Docket No. E-2017-0120 (Ma. Adm. Proceeding, Jan. 17, 2018).
- 40.
Id.
- 41.
State of New Jersey, Convertible Virtual Currency, TAM-2015-1(R), July 28, 2015, http://www.state.nj.us/treasury/taxation/pdf/pubs/tams/tam-2015-1.pdf
- 42.
W. Va. Code §61-15-1-4 (2017).
- 43.
Kansas Office of the State Bank Commissioner Guidance Document, Regulatory Treatment of Virtual Currencies Under the Kansas Money Transmission Act, MT-2014-01, https://www.scribd.com/document/233896435/Kansas-Virtual-Currency-Guidance-June-2014
- 44.
James G. Gatto, Maryland Court Rules Virtual Currency Casino Not Illegal Gambling Despite Secondary Market, National Law Review, Nov. 15, 2016, https://www.natlawreview.com/article/maryland-court-rules-virtual-currency-casino-not-illegal-gambling-despite-secondary
- 45.
Angie Jin, Virtual Casino Doesn’t Violate California’s Gambling Laws-Mason v. Machine Zone, Technology and Marketing Law Blog, Jan. 12, 2016, http://blog.ericgoldman.org/archives/2016/01/virtual-casino-doesnt-violate-californias-gambling-law-mason-v-machine-zone-guest-blog-post.htm
- 46.
In re Virtual Mining, Corporation, Mo. Sec. State, Case No. AP-14-09, June 2, 2014, https://www.sos.mo.gov/cmsimages/securities/orders/AP-14-09.pdf
- 47.
Department of Administration, Department of Financial Institutions, http://banking.mt.gov/Complaints
- 48.
N.H. 436, 2017 165th Sess. (N.H. 2017), https://legiscan.com/NH/bill/HB436/2017
- 49.
Amanda Garrett, First Bitcoin ATM Arrives in Akron as virtual currency challenges the real thing, Akron Beacon Journal, April 30, 2016, https://www.ohio.com/akron/business/first-bitcoin-atm-arrives-in-akron-as-virtual-currency-challenges-the-real-thing
- 50.
The Uniform Law Commission, also known as the National Conference of Commissioners on Uniform State Laws, was established in 1892 whose mission is “provide states with non-partisan, well-conceived and well-drafted legislation that brings clarity and stability to critical areas of state statutory law,” http://www.uniformlaws.org/Narrative.aspx?title=About the ULC
- 51.
National Conference of Commissioners on Uniform State Laws, Uniform Regulation of Virtual-Currency Businesses Act, July 14–20, 2017. http://www.uniformlaws.org/shared/docs/regulation%20of%20virtual%20currencies/2017AM_URVCBA_AsApproved.pdf
- 52.
Id. at 2.
- 53.
Id.
- 54.
State Legislators: Reject the “Uniform Regulation of Virtual Currency Business Act,” The Bitcoin Foundation, July 19, 2017, https://bitcoinfoundation.org/reject-uniform-regulation-virtual-currency-businesses-act/
- 55.
Citing Daniel Roberts, Behind the “exodus” of bitcoin startups from New York, Fortune, Aug. 14, 2017, http://fortune.com/2015/08/14/bitcoin-startups-leave-new-york-bitlicense/
- 56.
Llew Claasens, Letter to the National Conference of Commissioners on Uniform State Laws, The Bitcoin Foundation, Inc., July 14, 2017, https://bitcoinfoundation.org/wp-content/uploads/2017/07/ULC-Virtual-Currencies_Jul142017-final.pdf
- 57.
Conference of State Bank Supervisors, CSBS Policy on State Virtual Currency Regulation, Sept.15, 2017, https://www.csbs.org/model-regulatory-framework-virtual-currencies
- 58.
Conference of State Bank Supervisors, State Regulatory Requirements for Virtual Currency Activities: CSBS Model Regulatory Framework (Sept. 15, 2015), https://www.csbs.org/sites/default/files/2017-11/CSBS-Model-Regulatory-Framework%28September%2015%202015%29.pdf
- 59.
Id.
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Girasa, R. (2018). States’ Regulation of Virtual Currencies. In: Regulation of Cryptocurrencies and Blockchain Technologies. Palgrave Studies in Financial Services Technology. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-78509-7_5
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