Cryptocurrency firms in Hawaii are now officially exempt from the requirement to obtain a Money Transmitter License (MTL) to conduct business.
On June 30, 2024, the Hawai’i Department of Commerce and Consumer Affairs (DCCA) announced that the state had officially concluded the collaborative crypto research initiative Digital Currency Innovation Lab (DCIL).
Founded in 2020, DCIL’s objective was to evaluate the regulatory framework necessary for crypto-related companies and investigate the state’s digital currency activity.
Adhering to SEC and FinCEN Regulations
According to an official statement issued on June 28, Hawaii authorities have determined that digital currency companies will no longer be required to provide a Hawai’i-issued MTL to conduct business within the state after the project ends.
The DCCA stated that the companies could continue transaction activity as unregulated businesses. It also noted that crypto companies will still be responsible for complying with any applicable federal licensing or registration requirements.
This will encompass the standards established by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority, and the Financial Crimes Enforcement Network (FinCEN).
In addition, the statement mentions that compliance will encompass “any pertinent federal regulatory requirements involving consumer protection,” as well as Anti-Money Laundering measures and others.
MTL license Necessitates Substantial Resources
Federal U.S. laws and regulations that regulate the safety and integrity of the payments system in 48 states include state money transmitter licensing laws.
Significant investment and resources are necessary to obtain the MLT license, including maintaining permissible investments, a minimum net worth, a business plan, and a compliance program. Dilendorf Law Firm states that MTL requirements are inconsistent across states, which forces businesses to prioritize certain states.
Alchemy Pay, a crypto payment gateway, and other major industry firms have collaborated with regulators to obtain MLT licensing in numerous U.S. states.
Heightened Awareness of Crypto in Hawaii
Ensuring consumers know the dangers associated with cryptocurrencies was a key point of emphasis for DCIL Banking Commissioner Iris Ikeda.
“We encourage the public to remain informed when utilizing any form of digital currency,” Ikeda stated. He also noted that the authority’s primary objective will be to raise awareness of crypto-related risks as it transitions from studying digital currency to a more comprehensive understanding.
The statement indicated that the Federal Bureau of Investigation (FBI) recently warned the public about a new criminal scheme gaining traction to defraud cryptocurrency hoax victims.
On June 24, the FBI issued a warning that strongly advised consumers to exercise caution when viewing advertisements for crypto recovery services, safeguard their private information, and refrain from sending money.
In the past, the FBI issued an alert cautioning the public against using crypto money transmitting services not registered as Money Services Businesses (MSBs).