NEW YORK (InsideBitcoins) –As bitcoin is poised for greater consumer adoption, it is also facing growing regulatory pressures — and like the digital currency itself, so far the legal efforts are vast and decentralized. Peter Luce, a member of the payment law team with the Washington, DC office of law firm Davis Wright Tremaine, calls it a “patchwork of conflicting regulations, statutory interpretations, and regulatory delays” that bitcoin start-ups face.
“To date, no state has declared that offering cryptocurrency-related services to consumers is prohibited…”
“As we approach the end of a very active year in the emergence of virtual currency regulation, we developed a heat map of the regulatory climate faced by virtual currency wallet providers and exchanges – entities who maintain control over a consumer’s virtual currency assets as part of their services,” said Luce.
As shown in green in the map above, many states are accepting applications and issuing licenses.
“Several states, such as Washington, have stated that virtual currency activity falls within the scope of their money transmission statutes and have required that companies engaged in such activity obtain a license,” Luce says in a firm blog post. “Others, such as Texas and Kansas, have issued written guidance on where virtual currency activity fits in their regulatory regimes. Still other states have taken a ‘wait-and-see’ approach in order to give lawmakers time to study the industry and to come up with new rules to accommodate cryptocurrency-related services.”
Many of the states are accepting money transmitter license applications but have not indicated when those applications will be processed. In some states, including Hawaii, applicants for traditional money transmitter licenses are facing processing backlogs that can stretch beyond a year.
“Illinois has publicly stated that it is not accepting money transmitter license applications from companies that offer virtual currency-related money transmission services, but has quietly granted at least one such license,” Luce added. “To date, no state has declared that offering cryptocurrency-related services to consumers is prohibited, despite stern warnings from both state and federal regulators about the risks of investing in and securing cryptocurrencies.”