50-State Review of Cryptocurrency

and Blockchain Regulation

By Joseph Jasperse
At the moment, the United States has no federal regulatory framework for digital assets. Below is a
summary of what each state has done to regulate cryptocurrency and blockchain technology using
its own authorities. What can be found from this report is a general lack of uniformity across state-
level digital asset regulation.

Alabama

Cryptocurrency

Cryptocurrency is encompassed in existing money transmission statutes. Ala. Code § 8-7A-2 defines
monetary value as “A medium of exchange, including virtual or fiat currencies, whether or not
redeemable in money,” and money transmission as “Selling or issuing payment instruments, stored
value, or receiving money or monetary value for transmission.” Ala. Code § 8-7A-5 states that “A
person may not engage in the business of money transmission” unless they are licensed.

Alaska

Cryptocurrency

Alaska has no cryptocurrency-specific laws, but cryptocurrency is encompassed in existing money

transmission statutes. Alaska Stat. § 06.55.990 defines monetary value as “a medium of exchange,
whether or not redeemable in money,” and money transmission as “selling or issuing payment
instruments or stored value, or receiving money or monetary value for transmission.” AK Stat §
06.55.101 states that “A person may not engage in the business of money transmission…unless the
person” is licensed. The Alaska Division of Banking and Securities confirms that this requirement
applies to “Companies dealing with fiat and virtual currencies (cryptocurrencies),” stating that such
companies must “apply for a money transmitter license” and “enter into a Limited Licensing
Agreement (LLA) with the State of Alaska.”

Arizona
Cryptocurrency

Ariz. Rev. Stat. § 6-1201 broadly defines a money transmitter as “a person…who does any of the
following: (a) Sells or issues payment instruments; (b) Engages in the business of receiving money
for the transmission of or transmitting money; (c) Engages in the business of exchanging payment
instruments or money into any form of money or payment instrument; (d) Engages in the business of
receiving money for obligors for the purpose of paying that obligor’s bills, invoices or accounts; (e)
Meets the definition of a bank, financial agency or financial institution.” Major cryptocurrency
exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Arizona. AZ
Rev Stat § 44-1801 and AZ Rev Stat § 44-1844 create a framework under Arizona’s securities laws for
“crowdfunding or virtual coin offerings.”

Blockchain

Arizona has three statutes relating to blockchain. AZ Rev Stat § 44-7061 defines blockchain
technology and smart contract and states that a signature, record, or contract “that is secured
through blockchain technology is considered to be” an electronic signature or record. It also states
that “Smart contracts may exist in commerce” and “a person that…uses blockchain technology to
secure information that the person owns or has the right to use retains the same rights of ownership
or use with respect to that information as before the person secured the information using
blockchain technology.” AZ Rev Stat § 11-269.22 states that “A county may not prohibit or otherwise
restrict an individual from running a node on blockchain technology in a residence.” AZ Rev Stat §
13-3122 states that “It is unlawful to require a person to use or be subject to electronic firearm
tracking technology” where electronic firearm tracking is defined as “a platform, system or device or
a group of systems or devices that uses a shared ledger, distributed ledger or blockchain
technology.” In 2019, Arizona’s legislature adopted HB 2747 which appropriated “$1,250,000 for
distribution to applied research centers that specialize in blockchain technology.”

Pending Legislation

Arizona’s legislature is currently considering several bills relating to cryptocurrencies. HB 2204

(passed by the House on February 23, 2022) clarifies the state taxation of digital assets. SB 1127
would allow state agencies to accept cryptocurrency as a payment for fines, penalties, rent, rates,
taxes, fees, charges, revenue, financial obligations, and special assessments from cryptocurrency
issuers. SB 1128 and ​SCR 1014 exempt virtual currency from property tax. SB 1341 defines Bitcoin as
legal tender. SB 1383 (sent to the governor on June 8, 2022) includes cryptocurrency in the definition
of liquid assets for divorce matters. SB 1493 would allow state agencies to pay their employees in
virtual currency if requested by the employees. SCR 1013 defines digital currency as a medium
exchange and asserts the right to own digital currency.

Arkansas

Cryptocurrency
Arkansas has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing
money transmission statutes. AR Code § 23-55-102 defines monetary value as “a medium of
exchange, whether or not redeemable in money,” and money transmission as “selling or issuing
payment instruments, stored value, or receiving money or monetary value for transmission.” AR
Code § 23-55-201 states that “A person may not engage in the business of money transmission…
unless the person” is licensed. The Arkansas Securities Department has issued no-action letters to
certain digital asset businesses, exempting them from licensing requirements. This includes
Mythical, Inc. (June 22, 2020), which issued virtual currency in a video game, and River Financial, Inc.
(May 21, 2020), which sold its own Bitcoin inventory.

Blockchain

Arkansas’s Uniform Electronic Transactions Act includes blockchain technology and smart contracts
under AR Code § 25-32-122. This statute recognizes signatures, records, and contracts made
through blockchain technology as legally valid.

California

Cryptocurrency

California’s Department of Financial Protection and Innovation stated that the Department “has not
concluded whether Bitcoin and other cryptocurrencies are a form of money” and thus “has not
determined whether exchange services trigger the application of California’s banking or money
transmission laws.”[1] As such, digital asset providers are not required to be licensed or supervised,
but this determination could change. The Department of Financial Protection and Innovation has
provided numerous no-action letters to digital currency businesses. These letters often exempt
digital currency ATMs from licensing and have included peer-to-peer transfer businesses. In 2020, a
new Consumer Financial Protection Divison was created under the California Department of
Financial Protection. Part of this new division’s mandate is to research new financial products
including cryptocurrency.

Blockchain

On May 4, 2022, Governor Gavin Newsom signed Executive Order N-9-22 to “to Spur Responsible
Web3 Innovation, Grow Jobs, and Protect Consumers.” The order itself does not impose any new
regulations. Rather, it calls for further research and engagement on the topic of cryptocurrency and
blockchain to eventually create a transparent and protective regulatory framework.

Pending Legislation

California’s legislature is currently considering a few relevant bills. AB 2269 (passed by the Assembly
on May 12, 2022) would “prohibit a person from engaging in digital financial asset business activity”
unless “the person is licensed or registered with the Department of Financial Protection and
Innovation.” AB 2689 allows private and public entities to accept virtual currency as a method of
payment. SB 1275 could similarly allow state agencies to accept cryptocurrency as payment.
Colorado

Cryptocurrency

In 2018, Colorado’s Division of Banking issued interim guidance regarding cryptocurrencies. The
guidance requires licensing as a money transmitter when “A person is engaged in the business of
selling and buying cryptocurrencies for fiat currency; and A Colorado customer can transfer
cryptocurrency to another customer within the exchange; and The exchange has the ability to
transfer fiat currency through the medium of cryptocurrency.” The 2019 Colorado Digital Token Act
exempts individuals dealing with cryptocurrency from certain securities registration requirements,
and broker-dealer and salesperson licensing requirements. To satisfy the exemption, businesses
must file a notice with the Colorado Securities Commissioner before offering, selling, or transferring
cryptocurrency tokens. CO Rev Stat § 38-13-102 states that virtual currency under the Uniform
Unclaimed Property Act “does not include…The software or protocols governing the transfer of the
digital representation of value.”

Blockchain

CO Rev Stat § 24-37.5-105 states that “in the administration of any new major information
technology project, the [O]ffice [of Information Technology]…shall evaluate the potential use of
blockchain and distributed ledger technologies as part of the project.” It further states that “The
office shall conduct an assessment and bring recommendations for distributed ledger or blockchain
implementations to the joint technology committee of the general assembly.”

Pending Legislation

Two bills have been passed by Colorado’s legislature and sent to the governor for signing. HB 1053
mandates the Department of Agriculture to create an online program to educate agriculture
producers about blockchain technology. SB 25 would allow the treasurer to sell digital security
tokens using blockchain technology for state financing.

Connecticut

Cryptocurrency

CT Gen. Stat. § 36a-596 defines virtual currency as “any type of digital unit that is used as a medium
of exchange or a form of digitally stored value or that is incorporated into payment system
technology,” and includes such currency under the definition of money transmission. CT Gen. Stat. §
36a-597 states that “No person shall engage in the business of money transmission in this state…
without a main office license issued by the commissioner.” CT Gen. Stat. § 36a-598 requires money
transmission businesses seeking a license to declare whether their activities “will include the
transmission of monetary value in the form of virtual currency.” CT Gen. Stat. § 36a-600
acknowledges that businesses engaged in the transmission of virtual currency may be denied a
license at “the commissioner’s discretion” or face “additional requirements, restrictions or
conditions.” CT Gen. Stat. § 36a-602 adds additional surety bond requirements for virtual currency
transmitters to account for price volatility. CT Gen. Stat. § 36a-603 requires that non-depository
financial institutions “​​hold virtual currency of the same type and amount owed or obligated to such
other person.” Connecticut’s Department of Banking has written multiple opinions solidifying
cryptocurrency exchanges as license-requiring money transmitters,[2] but has generally excluded
digital currency ATMs from this designation.[3] Connecticut’s governor recently signed two laws
relating to cryptocurrencies. HB 5506 (May 7, 2022) and SB 3 (May 10, 2022) require the Board of
Regents for Higher Education to develop seminar programs to educate small businesses about
electronic commerce and virtual currency.

Blockchain

In 2018, Connecticut’s governor signed into law SB 443, which establishes “a working group to
develop a master plan for fostering the expansion of the blockchain industry in the state and
recommend policies and state investments to make Connecticut a leader in blockchain technology.”
SB 1039 was signed in 2021, and requires “the Department of Administrative Services” to “develop
and issue a request for information for the incorporation of blockchain technology to make a state
administrative function more efficient or cost-effective.”

Delaware

Cryptocurrency

Delaware has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing

money transmission statutes. 5 DE Code § 2303 states that “No person…shall…engage in the
business of receiving money for transmission or transmitting the same without having first obtained
a license hereunder.” However, money transmission is not defined in Delaware law. Major
cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters
in Delaware.

Blockchain

Delaware allows corporations to maintain their records on a blockchain or blockchain-like

technology. 8 DE Code § 224 states that “Any records administered by or on behalf of the
corporation in the regular course of its business, including its stock ledger, books of account, and
minute books, may be kept on, or by means of, or be in the form of, any information storage device,
method, or 1 or more electronic networks or databases (including 1 or more distributed electronic
networks or databases).” 8 DE Code § 219 and 8 DE Code § 232 provide rules for the transmission of
shareholder notifications when corporate records are stored on an electronic network or a
blockchain. SB 194, signed in 2018, amends Delaware’s code to allow blockchain technology to be
used by statutory trusts. 12 DE Code § 3801 states that beneficial interest in a statutory trust may be
evidenced electronically by “1 or more electronic networks or databases (including 1 or more
distributed electronic networks or databases).” 12 DE Code § 3806 states that beneficial owners and
trustees may “may vote…by means of electronic transmission” including by use of distributed
electronic networks or databases. 12 DE Code § 3819 states that “A statutory trust may maintain its
records …by means of…1 or more electronic networks or databases (including 1 or more distributed
electronic networks or databases), if such form is capable of conversion into paper form within a
reasonable time.” SB 183, which was also signed in 2018, makes similar provisions for LLCs and
limited partnerships. SB 89, SB 90, and SB 91 were enacted in 2019, and collectively amend the
Delaware Revised Uniform Partnership Act and Delaware Limited Liability Company Act, among
other statutes, to allow the use of blockchain technology to maintain certain records and facilitate
certain electronic transmissions.

District of Columbia

Cryptocurrency

D.C. has no cryptocurrency-specific statutes, but case law from United States v. Harmon (2021)
establishes that cryptocurrency businesses fall under the Money Transmission Act and must register
as money transmitters.

Florida

Cryptocurrency

FL Stat § 896.101 includes virtual currency in its definition of monetary instruments. FL Stat § 560.103
defines a money transmitter as an entity that “receives currency, monetary value, or payment
instruments for the purpose of transmitting the same by any means.” FL Stat § 560.125 states that “A
person may not engage in the business of a money services business or deferred presentment
provider in this state unless the person is licensed.” State v. Espinoza (2019) found that this licensing
requirement includes those conducting cryptocurrency transactions, even two-party, individual,
ones. The deadline to comply with the Espinoza ruling was the last day of 2021. On May 12, 2022,
Governor Ron DeSantis signed HB 273 into law, which revises many of Florida’s existing
cryptocurrency statutes. The law defines virtual currency under FL Stat § 560.103 and explicitly
includes virtual currency transmitters in the scope of FL Stat § 560. It clarifies FL Stat § 560.125 and
partially undoes the Espinoza ruling, stating that money transmitter licenses are only required for
“intermediaries” that “transmit…virtual currency from one person to another location or person,” and
who have “the ability to unilaterally execute or indefinitely prevent a transaction.” Therefore, two-
party, individual transactions will no longer require licensing, but major exchanges still will. HB 273
eases restrictions on these exchanges by excluding virtual currency from the definition of payment
instrument and regulating exchanges solely under money service business regulations. It also allows
exchanges to only hold virtual currency of the same type and amount owed instead of requiring
additional cash reserves. The law takes effect on January 1, 2023, and will solidify Florida as a
crypto-friendly state. FL Stat § 559.952 establishes a Financial Technology Sandbox “to allow
financial technology innovators to test new products and services in a supervised, flexible regulatory
sandbox using exceptions to specified general law and waivers of the corresponding rule
requirements under defined conditions.” Under this law, developing blockchain or cryptocurrency
businesses with sandbox permission are exempt from needing a money transmitter license during
the license period and face less regulatory scrutiny.

Blockchain

In 2019, Florida adopted HB 1393 which “establish[ed] the Florida Blockchain Task Force within the
[D]epartment [of Financial Services.”
Georgia

Cryptocurrency

GA Code § 7-1-680 defines money transmission as “engaging in the business of receiving money or
monetary value for transmission” and virtual currency as “a digital representation of monetary value
that does not have legal tender status.” GA Code § 7-1-681 states that “No person…shall engage in…
money transmission without having first obtained a license authorizing such activity.” Based on the
prior definitions, cryptocurrency transactions fall under this licensing requirement. The Department
of Banking and Finance has issued Cease and Desist Orders against unlicensed cryptocurrency
platforms, such as with CampBX in 2018. GA Code § 7-1-690 further allows the Department of
Banking and Finance “to enact rules and regulations that apply solely to persons engaged in money
transmission or the sale of payment instruments involving virtual currency.” GA Code § 53-13-2
defines a digital asset under the Revised Uniform Fiduciary Access to Digital Assets Act as “an
electronic record in which an individual has a right or interest. Such term shall not include an
underlying asset or liability unless the asset or liability is itself an electronic record.” The Act lays out
rules for who can access a person’s digital assets, among other things.

Hawaii

Cryptocurrency

Since June 30, 2020, businesses must get permission from Hawaii’s Digital Currency Innovation Lab
to engage in cryptocurrency transactions under a “two-year program to evaluate whether the digital
currency industry should be licensed or not.” After this date, legislation is needed “to enable
reasonable licensing of this industry or exempt it from licensing.” The pilot project was recently
extended another two years to end on June 30, 2022 (HR 115). This came after numerous other bills
that attempted to set up a licensing process failed to pass.[4]

Pending Legislation

The legislature recently passed SB 2695 (sent to the governor on May 6, 2022), which would
establish a task force for blockchain and cryptocurrency.

Idaho

Cryptocurrency

The Idaho Department of Finance explicitly states that “Virtual Currency Exchangers” are “required
to have an Idaho Money Transmitter license.” That being said, the Department has issued numerous
no-action letters for businesses selling their own inventory of digital currency, often through digital
currency ATMs, which exempts these businesses from licensing requirements. The Department has
also exempted businesses where “all exchange margin trading and/or lending is strictly limited to
digital assets” and that do “not permit trading in, or allow deposits of, fiat currency.” “The Digital
Assets Act was signed into law by Idaho’s governor on March 28. This law categorizes digital assets
as intangible personal property and applies existing property laws to such assets.
Illinois

Cryptocurrency

05 ILCS 657, Illinois’ Transmitters of Money Act, is unclear about how digital currencies should be
treated. Illinois’ Department of Financial and Professional Regulation released guidance in 2017
stating that: “A person or entity engaged in the transmission of solely digital currencies…would not
be required to obtain a [Transmitters of Money Act] license. However, should transmission of digital
currencies involve money in a transaction, that transaction may be considered money transmission
depending on how the transaction is organized. Any person or entity engaging in a transaction
involving both digital currencies and money should request a determination from the Department on
whether or not such activity will require a [Transmitters of Money Act] license.” Consequently, the
Division of Financial Institutions has issued numerous non-binding statements to advise
cryptocurrency businesses whether they must be licensed. In 2019 Illinois enacted SB 1464, which
incorporates cryptocurrency into the Illinois Funeral or Burial Funds Act.

Blockchain

Illinois launched the Illinois Blockchain Initiative “to determine if this groundbreaking technology can
be leveraged to create more efficient, integrated and trusted state services, while providing a
welcoming environment for the Blockchain community.” The initiative consists of several state and
county agencies including the Department of Innovation and Technology. In 2020, the Illinois
Blockchain Technology Act went into effect, which generally recognizes the validity of blockchain
records in commerce and “Provides for the permitted uses of blockchain technology in transactions
and proceedings.” The Act also “Provides limitations to the use of blockchain technology” and
“Prohibits units of local government from implementing specified restrictions on the use of
blockchain technology.” Illinois passed the Blockchain Business Development Act at around the
same time. This act calls for “opportunities to promote blockchain technology,” “legal and regulatory
mechanisms that enable and promote the adoption of blockchain technology,” and “educational and
workforce training opportunities in blockchain technology.”

Pending Legislation

Illinois’ legislature is currently considering several bills relating to cryptocurrency and blockchain. HB
5287 (passed by the House on February 24, 2022) defines cryptocurrency and allows for state
agencies to accept cryptocurrency as payment if there are no exchange fees for conversion into
USD. HB 5427 amends the Blockchain Technology Act by setting “forth provisions concerning
permissible discovery of facts and information concerning digital assets and discovery procedures
for digital assets” and establishes a “Digital Asset Discovery Task Force to conduct a review” of
these provisions. SB 3435 “Amends the Blockchain Business Development Act to provide that the
Department of Financial and Professional Regulation shall have authority to adopt rules, opinions, or
interpretive letters regarding the provision of custodial services for digital assets.” SB 3643 defines
cryptocurrency and cryptocurrency mining, and clarifies the definition of a qualifying Illinois
datacenter “to include data centers engaged in cryptocurrency mining over a 60-month period.”

Indiana
Cryptocurrency

IN Code § 28-8-4-13 does not mention digital currency in the definition of money transmission. The
Indiana Department of Financial Institutions states that “a money transmitter license is not required”
for “A fiat or virtual currency exchange, as long as the consumer is strictly buying or selling the
currency and the consumer does not have the ability to send fiat currency to another consumer.”
Indiana’s governor recently signed into law SB 351, which amends Indiana’s UCC by adding a new
chapter governing the possession of controllable electronic records. Indiana adopted SB 188 in 2021,
which incorporates cryptocurrency into the Revised Uniform Unclaimed Property Act.

Iowa

Cryptocurrency

IA Code § 533C.103 does not list digital currency businesses as an exception from Iowa’s Uniform
Money Services Act. Therefore, businesses dealing with cryptocurrency are likely governed by IA
Code § 533C.201, which states that “A person shall not engage in the business of money
transmission…unless the person” is licensed. Major cryptocurrency exchanges Coinbase, Binance,
and Gemini have all registered as money transmitters in Iowa. HF 2445 was signed into law by
Iowa’s governor on June 13, 2022, which amends Iowa’s UCC by adding a new chapter governing the
possession of controllable electronic records.

Blockchain

On May 20, 2022, Iowa’s governor signed SB 541, which “permit[s] the use of distributed ledger
technology and smart contracts.”

Kansas

Cryptocurrency

KS Stat § 9-508 broadly defines money transmission as “to engage in the business of the sale or
issuance of payment instruments or of receiving money or monetary value for transmission to a
location within or outside the United States,” which could include digital currency. In 2021, the
Kansas Office of the State Bank Commissioner issued guidance clarifying that “an entity engaged
solely in the transmission of such currency would not be required to obtain a license in the State of
Kansas. However, should the transmission of virtual currency include the involvement of sovereign
currency in a transaction, it may be considered money transmission depending on how such
transaction is organized.”

Blockchain

On April 18, 2019, HB 2039 was signed into law, which allows “distributed electronic networks or
databases” to be used to keep various business records.

Kentucky
Cryptocurrency

KY Rev Stat § 286.11-003 broadly defines money transmission as “engaging in the business of
receiving money or monetary value to transmit, deliver, or instruct to be transmitted or delivered,
money or monetary value,” which could include digital currency. If so, cryptocurrency businesses
would be governed by KY Rev Stat § 286.11-005, which states that “no person shall engage in the
business of money transmission in this state without a license.” Major cryptocurrency exchanges
Coinbase, Binance, and Gemini have all registered as money transmitters in Kentucky. KY Rev Stat §
393A.010 includes virtual currency under Kentucky’s Unclaimed Property Act. On March 25, both SB
255 and HB 230 were enacted. The two bills lay out provisions for commercial mining of
cryptocurrency and its taxation, including a tax break for certain mining operations.

Blockchain

In April 2020, Kentucky adopted SB 55, which “established a Blockchain Technology Working Group”
to “evaluate the feasibility and efficacy of using blockchain technology to enhance the security of
and increase protection for the state’s critical infrastructure.”

Louisiana

Cryptocurrency

LA Rev Stat § 6:1381, known as the Virtual Currency Business Act, lays out a series of regulations for
virtual currency businesses. Most notably, LA Rev Stat § 6:1384 states that “A person shall not
engage in virtual currency business activity…unless the person is one of the following: (1) Licensed
in this state…(2) Registered with the department and operating pursuant to R.S. 6:1390. (3) Exempt
from licensure or registration.” LA Rev Stat § 6:1383 provides exemptions for businesses governed by
“(1) The Electronic Fund Transfer Act of 1978. (2) The Securities Exchange Act of 1934. (3) The
Commodities Exchange Act of 1936. (4) The Louisiana Securities Law.” This section also exempts
regulated financial institutions, foreign exchange businesses, attorneys to the extent of providing
escrow services, those using cryptocurrencies for personal or academic purposes, and many others.
LA Rev Stat § 6:1389 further exempts “A person whose volume of virtual currency business activity
in United States dollar equivalent of virtual currency will not exceed thirty-five thousand dollars
annually” under certain other conditions. The Office of Financial Institutions has the right to “take an
enforcement measure against a licensee, registrant, or person that is neither a licensee nor
registrant but is engaging in virtual currency business activity” under LA Rev Stat § 6:1393.

Pending Legislation

Louisiana’s legislature has recently passed a few bills relating to cryptocurrency. HB 802 (sent to the
governor on June 3, 2022) would “allow financial institutions and trust companies to serve as
custodians of digital assets.” HCR 103 (presented to the Secretary of State on June 6, 2022) directs
the Cash Management Review Board to “research, report, and make recommendations” on “the use
of digital assets” in Louisiana. HR 180 (presented to the Secretary of State on June 8, 2022) asks “the
Supervisory Committee on Campaign Finance Disclosure to study issues surrounding the
acceptance of campaign contributions in the form of cryptocurrency.”
Maine

Cryptocurrency

32 ME Rev Stat § 6102 defines money transmission as “the business of selling or issuing payment
instruments or the business of receiving money, including virtual currencies, for transmission or
transmitting money, including virtual currencies, within the United States or to locations abroad by
any means.” 32 ME Rev Stat § 6103 states that “a person…​​may not engage in the business of money
transmission without.” As virtual currency is explicitly defined under money transmission, such
transactions require a license.

Maryland

Cryptocurrency

Financial Institutions Code Ann. § 12-401 defines money transmission as including “Any informal
money transfer system engaged in as a business for, or network of persons who engage as a
business in, facilitating the transfer of money outside the conventional financial institutions system,”
which could include cryptocurrency transactions. Maryland’s Office of the Commissioner of
Financial Regulation seems to confirm this inclusion by stating that it regulates “Money
Transmission, including transmission of virtual currency.” MD. Financial Institutions Code Ann. § 12-
405 states that “A person may not engage in the business of money transmission” unless the person
“Is licensed by the Commissioner” or “Is a person exempted from licensing.” The Maryland Financial
Consumer Protection Act of 2018 calls for the Financial Consumer Protection Commission to study
blockchain technology, cryptocurrency, initial coin offerings, and cryptocurrency exchanges. The act
also requires the Office of the Commissioner of Financial Regulation to “identify any gaps in the
regulation of Fintech firms, including any specific types of companies that are not subject to
regulation under State law.”

Blockchain

In 2019, Maryland adopted SB 136, which “authoriz[es] certain records of a corporation to be

maintained by means…a distributed electronic network or database.”

Massachusetts

Cryptocurrency

Under 209 CMR 45.00 MA Code of Regs 45.02, Massachusetts only regulates money transmission to
foreign countries. The Massachusetts Department of Banking issued Opinion 19-008 in 2020 which
found that a company that processed fiat to virtual currency exchanges and allowed for cross-
border virtual currency transactions did not consist of license-requiring international money
transmission. Opinion 020-003, also in 2020, found that a company providing a digital wallet service
and peer-to-peer transactions did not require a license either.

Pending Legislation
The Massachusetts legislature is currently considering bill HB 126 which establishes “a special
commission on blockchain and cryptocurrency.”

Michigan

Cryptocurrency

MI Comp L § 487.1003 defines money transmission services as “selling or issuing payment

instruments or stored value devices or receiving money or monetary value for transmission.” MI
Comp L § 487.1011 states that “a person shall not provide money transmission services… without a
license.” According to Michigan’s Department of Insurance and Financial Services, money
transmission services include “holding funds in an e-wallet” and such services providers “would
need to obtain the appropriate license.” In 2015, the Michigan Department of Treasury published
guidance on how state sales tax applies to virtual currency. In December 2019, Michigan enacted HB
4107, HB 4103, HB 4105, and HB 4106, which amended the Michigan penal code to include definitions
for cryptocurrency and distributed ledger technology.

Pending Legislation

The Michigan legislature is currently considering bill SB 888 which establishes a “blockchain and
cryptocurrency commission.”

Minnesota

Cryptocurrency

Minnesota has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in

existing money transmission statutes. MN Stat § 53B.03 defines money transmission as “selling or
issuing payment instruments or engaging in the business of receiving money for transmission or
transmitting money.” MN Stat § 53B.02 states that “no person…shall engage in the business of
money transmission without a license.” Major cryptocurrency exchanges Coinbase, Binance, and
Gemini have all registered as money transmitters in Minnesota.

Mississippi

Cryptocurrency

Mississippi has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in

existing money transmission statutes. MS Code § 75-15-3 defines monetary value as “a medium of
exchange, whether or not redeemable in money” and money transmission as “to engage in the
business of the sale or issuance of checks or of receiving money or monetary value for transmission
to a location within or outside the United States by any and all means.” MS Code § 75-15-5 states
that “No person…shall engage in the business of money transmission…without having first obtained
a license.” Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as
money transmitters in Mississippi.
Missouri

Cryptocurrency

Missouri has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in the

existing sale of checks law. MO Rev Stat § 361.700 defines a check as “any instrument for the
transmission or payment of money and shall also include any electronic means of transmitting or
paying money.” MO Rev Stat § 361.705 states that “No person shall issue checks…without first
obtaining a license from the director.” Major cryptocurrency exchanges Coinbase, Binance, and
Gemini have all registered as money transmitters in Missouri, but Binance is the only one to register
under “Sale of Checks.”

Pending Legislation

Missouri’s legislature recently passed HB 1472, which was sent to the governor on May 18, 2022. This
bill would modify the offense of money laundering to more broadly encompass financial transactions
and adds a definition for cryptocurrency.

Montana

Cryptocurrency

Montana’s Department of Banking and Financial Regulations explicitly states that “There is currently
no legislation from the Montana Division of Banking regulating Money Service Businesses (MSBs).
MSBs do not have to be licensed with the Division.” MT Admin Rules 44.11.408 states that “A
candidate or political committee may accept electronic contributions from online payment service
providers and payment gateways…such as Bitcoin or other electronic peer-to-peer systems” and “All
electronic contributions shall be reported.” In 2019, Montana’s governor signed HB 584, which
exempts cryptocurrency transactions from certain securities laws and defines utility token.

Nebraska

Cryptocurrency

The Nebraska Financial Innovation Act (NE Code § 8-3001 to 3031) lays out a series of guidelines for
how digital asset depositories are chartered, operated, supervised, and regulated in Nebraska. The
express intent of the Act is to “provide a necessary and valuable service to blockchain innovators
and customers, emphasize Nebraska’s partnership with the technology and financial industry, safely
grow this state’s ever-evolving financial sector, and afford more opportunities for Nebraska
residents.” NE Code § 8-3003 defines a digital asset depository as “a financial institution that
securely holds liquid assets…in the form of controllable electronic records.” The same section
defines blockchain, controllable electronic record, decentralized finance, fork, and stablecoin. NE
Code § 8-3015 states that “No corporation shall act as a digital asset depository without first
obtaining authority or a charter to operate” from the Director of Banking and Finance. Existing
financial institutions need authorization to open a digital asset depository department while strictly
digital asset depository institutions need a new charter. NE Code § 8-3005 permits digital asset
depositories to “Carry on a nonlending digital asset banking business” and “Provide payment
services.” The same section states that digital asset depositories “shall not accept demand deposits
of United States currency” or “make any consumer loans.” NE Code § 8-3024 allows digital asset
depositories to “Provide digital asset and cryptocurrency custody services…Issue stablecoins and…
Use independent node verification networks and stablecoins for payment activities.” LB 707, signed
into law on April 18, amends this section to restrict digital asset and cryptocurrency custody services
to cryptocurrency that was either “Initially offered for public trade more than six months prior to the
date of the custody services” or “Created or issued by any bank, savings bank, savings and loan
association, or building and loan association” authorized to do business in Nebraska. NE Code § 8-
3008 requires digital asset depositories to give customers “full and complete” disclosure of account
terms and conditions with “no material misrepresentations” and “in readily understandable
language.” NE Code § 8-3009 requires that digital asset depositories “maintain unencumbered liquid
assets denominated in United States dollars valued at not less than one hundred percent of the
digital assets in custody.” The Act overall allows Nebraska banks to offer cryptocurrency services
that are not available in the vast majority of other states.

Nebraska has other laws relating to cryptocurrency beyond the Financial Innovation Act. NE Code §
8-2715 defines monetary value as “a medium of exchange, whether or not redeemable in money,”
which encompasses cryptocurrency. NE Code § 8-2716 defines money transmission as “the
business of the sale or issuance of payment instruments or stored value or of receiving money or
monetary value for transmission to a location.” NE Code § 8-2725 states that “a person shall not
engage in money transmission without a license.” NE Code § 8-2724 states that “The requirement for
a [money transmission] license…does not apply to…[chartered] digital asset depository institutions.”
316 NE Admin Rules and Regs ch 316-54-102 includes cryptocurrency under “unacceptable forms of
payment” for “Mechanical Amusement Devices” (such as slot machines).

Nevada

Cryptocurrency

The Nevada Financial Institutions Division states that “​​Any entity that facilitates the transmission of
or holds fiat or digital currency…should contact the NFID to request a licensure determination.”
Whether a license is required is decided on a case-by-case basis. However, the Division advises that
“an entity engaged in the business of selling or issuing checks or of receiving for transmission or
transmitting money or credits is required to have a license under [NV Rev Stat § 671]. However, if an
entity proposes to serve as a digital custodian for any form of digital currency, then the business may
be regulated as a trust company under [NV Rev Stat § 669].” NV Rev Stat § 657a creates a
Regulatory Experimentation Program (sandbox) for Product Innovation. Under this program,
companies that use “a new or emerging technology, or any novel use of an existing technology, to
address a problem, provide a benefit or otherwise offer or provide a financial product or service that
is determined by the Director not to be widely available in this State” (NV Rev Stat § 657A.150) can if
accepted, “obtain limited access to markets” without “Applying for or obtaining any license or other
authorization otherwise required” (NV Rev Stat § 657A.200). The statute lays out a series of specific
requirements for disclosure, operation, and oversight during the two-year testing period. In 2019,
Nevada adopted three bills that include virtual currency in existing laws. SB 164 “clarif[ies] that
certain virtual currencies are intangible personal property for the purposes of taxation.” AB 15
includes virtual currency in the definition of a monetary instrument for the purpose of crimes related
to certain financial transactions. SB 44 includes virtual currency in the definition of property under
the Revised Uniform Unclaimed Property Act.

Blockchain

In 2017, Nevada enacted SB 398, which made it the first state to ban local governments from taxing
blockchain use. The law also “recogniz[es] blockchain technology as a type of electronic record for
the purposes of the Uniform Electronic Transactions Act.” Nevada enacted two other blockchain-
related laws in 2019 that have similar provisions. SB 162 adds “that a person who uses a public
blockchain to secure information does not relinquish any right of ownership related to that
information.” SB 163 additionally “revis[es] the definition of ‘electronic transmission’… to include the
use of a blockchain” and “authoriz[es] certain business entities to store certain records on a
blockchain” and “revis[es] provisions authorizing the Secretary of State to adopt regulations to
define certain terms to allow certain business entities to carry out their powers and duties using…
blockchains.” In the same year, Nevada created the Cannabis Advisory Commission under AB 533.
The commission is tasked with, among other things, “Study[ing] the feasibility of the use of
emerging technologies, including…blockchain…as a means of collecting data or efficiently and
effectively handling transactions electronically to reduce or eliminate the handling of cash.”

New Hampshire

Cryptocurrency

NH Rev Stat § 399-G:1 defines convertible virtual currency as “​​a digital representation of value that:
(a) Can be a medium of exchange, a unit of account, and/or a store of value; (b) Has an equivalent
value in real currency or acts as a substitute for real currency; (c) May be centralized or
decentralized; and (d) Can be exchanged for currency or other convertible virtual currency.” NH Rev
Stat § 399-G:3 states that “Persons who engage in the business of selling or issuing payment
instruments or stored value solely in the form of convertible virtual currency” are exempt from
licensing as a money transmitter, but “shall be subject to the provisions of” NH Rev Stat § 358-A
(Regulation of Business Practices for Consumer Protection). Businesses that transact with additional
forms of monetary value, defined as “a medium of exchange, whether or not redeemable in currency,
and includes convertible virtual currency” (NH Rev Stat § 399-G:1), “shall obtain a license” (NH Rev
Stat § 399-G:2). The New Hampshire Banking Department has confirmed this interpretation in a
written statement. On February 9, 2022, Governor Christopher Sununu signed Executive Order 2022-
1, establishing “​​the Governor’s Commission on Cryptocurrencies and Other Digital Assets” to
research and report on “the role and effectiveness of current state laws and regulations governing
cryptocurrencies and other digital assets and the reasons why modifications and improvements to
such laws and regulations are necessary.”

Pending Legislation

New Hampshire’s legislature is currently considering two bills relating to cryptocurrency. HB 1502
“specifies that digital assets are property within the Uniform Commercial Code; authorizes security
interests in digital assets, allows banks to provide custodial services for digital asset property and
provides procedures for the provision of custodial services.” HB 1503 “exempts the developer, seller,
or facilitator of the exchange of an open blockchain token from certain securities laws.”

New Jersey

Cryptocurrency

NJ Rev Stat § 17:15C-2 broadly defines a payment instrument as an “instrument or written order for
the transmission or payment of money,” which could include cryptocurrency. The same statute
defines a money transmitter as “a person who engages…in the business of: (1) the sale or issuance
of payment instruments for a fee, commission or other benefit; (2) the receipt of money for
transmission or transmitting money…; or (3) the receipt of money for obligors for the purpose of
paying obligors’ bills, invoices or accounts for a fee, commission or other benefit paid by the obligor.”
NJ Rev Stat § 17:15C-4 states that “No person…shall engage in the business of money transmission
without a license.” NJ Rev Stat § 3B:14-61.1, New Jersey’s Uniform Fiduciary Access to Digital Assets
Act, allows estates to manage digital assets under certain circumstances.

Blockchain

In 2019, New Jersey enacted SB 2297, which “creat[es] the New Jersey Blockchain Initiative Task
Force to study whether State, county, and municipal governments can benefit from a transition to a
Blockblockchain-based system for recordkeeping and service delivery.”

Pending Legislation

New Jersey’s legislature is currently considering several relevant bills. AB 385 “Requires Department
of Treasury to review and approve digital payment platform.” AB 1975/SB 1267 would add the “Virtual
Currency and Blockchain Regulation Act” to New Jersey’s statutes. AB 2371/SB 1756 would add the
“Digital Asset and Blockchain Technology Act” to New Jersey’s Statutes. AB 3287 “Prohibits public
officials from accepting virtual currency and non-fungible tokens as gifts.”

New Mexico

Cryptocurrency

The New Mexico Regulation and Licensing Department defines “Virtual currency exchanging and
trading services” as a “Money Service Business (MSB).” As an MSB, businesses must “submit an
initial application followed by and annual renewal license applications, along with the appropriate
fees.”

New York

Cryptocurrency
New York’s Department of Financial Services established the BitLicense in 2015 under 23 NY Comp
Codes Rules and Regs § 200 to regulate virtual currency businesses. 23 NY Comp Codes Rules and
Regs § 200.2 defines Virtual Currency Business activity as “any one of the following types of
activities…: (1) receiving Virtual Currency for Transmission or Transmitting Virtual Currency, except
where the transaction is undertaken for non-financial purposes and does not involve the transfer of
more than a nominal amount of Virtual Currency; (2) storing, holding, or maintaining custody or
control of Virtual Currency on behalf of others; (3) buying and selling Virtual Currency as a customer
business; (4) performing Exchange Services as a customer business; or (5) controlling,
administering, or issuing a Virtual Currency.” 23 NY Comp Codes Rules and Regs § 200.3 states that
“No Person shall, without a license obtained from the superintendent as provided in this Part,
engage in any Virtual Currency Business Activity.” The rest of the statute lays out a series of
requirements for licensees including capital requirements, AML programs, consumer protection, and
many others. NY Banking L § 641 states that “No person shall engage in the business of…receiving
money for transmission or transmitting the same, without a license.” Thus, businesses that transact
in both fiat and cryptocurrency require both a money transmitter license and a BitLicense. This
interpretation is confirmed by the Department of Financial Services’ BitLicense FAQs. The
Department also states that “A business that is chartered under the New York Banking Law (for
example, a New York State limited purpose trust company or a New York State bank) can engage in
Virtual Currency Business Activity without a BitLicense if it has received the Superintendent’s
approval to do so.” In 2020, New York’s Department of Financial Services proposed offering a
conditional BitLicense for virtual currency companies to operate in a limited fashion by collaborating
with authorized BitLicensees. This would allow early-stage companies to be supervised by the
Department of Financial Services without going through the expensive process of getting a full
BitLicense. In 2018, New York enacted AB 8783 to “establish the digital currency task force.” In 2019,
SB 1194 increased the membership of the task force to 13 members. Signed into law by Governor
Kathleen Hochul on April 9, 2022, AB 9009 “expands the definition of financial institution under the
financial institution data match program,” which now includes virtual currency businesses. On June
8, 2022, New York’s Department of Financial Services released Guidance on the Issuance of U.S.
Dollar-Backed Stablecoins, which adds requirements for “the redeemability of such stablecoins; the
asset reserves that back such stablecoins…; and attestations concerning the backing by these
Reserves.”

Pending Legislation

New York’s legislature is currently considering several relevant bills. AB 3099/SB 5643 “Establishes
the office of financial resilience to develop and implement new programs and initiatives for the
purpose of supporting local economies and promoting resilient financial models.” AB 3336
“establishes a regulatory sandbox program” for “financial technology products and services.” AB
3747 “Establishes a task force to study the potential designation of economic empowerment zones
for the mining of cryptocurrencies in the state of New York.” AB 3860/SB 5042 “Establishes a task
force to study the impact of a state-issued cryptocurrency on the state of New York.” AB 3906
“Establishes that state agencies are allowed to accept cryptocurrencies such as bitcoin, ethereum,
litecoin and bitcoin cash as payment.” AB 7389 (sent to the governor on June 2, 2022) “Establishes a
moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to
validate blockchain transactions; provides that such operations shall be subject to a full generic
environmental impact statement review.” AB 7742 (sent to the governor on June 2, 2022) “Includes
unclaimed virtual currency as abandoned property.” AB 7849/SB 7500 “Requires the…department of
financial services to assess persons regulated under the financial services law that engage in virtual
currency business activity for the operating expenses of the department that are solely attributable
to regulating such persons.” AB 7866/SB 6584 “Directs the New York state energy research and
development authority to conduct a study on powering cryptocurrency mining facilities with
renewable energy.” AB 8598 “Prohibits the investment of certain public funds with companies
conducting a cryptocurrency business activity; directs the comptroller to take appropriate action to
sell, redeem, divest or withdraw any investment held in such company.” AB 8820/SB 8839
“Establishes the offenses of virtual token fraud, illegal rug pulls, private key fraud and fraudulent
failure to disclose interest in virtual tokens.” AB 9028, SB 8838, AB 9029/SB 9410, and SB 9275
require disclosures in advertisements involving virtual tokens. AB 9086/SB 7272 “Relates to
reporting of cryptocurrency holdings on the annual statement of financial disclosure filed with the
legislative ethics commission or the joint commission on public ethics.” AB 9275 (sent to the
governor on June 3, 2022) “Establishes the New York state cryptocurrency and blockchain study task
force to” study “the effects of the widespread use of cryptocurrencies and other forms of digital
currencies and…blockchain technology, in the state.” SB 5044 “Creates the digital currency task
force to” study “the potential effects of the widespread implementation of digital currencies on
financial markets in the state.”

North Carolina

Cryptocurrency

NC Gen Stat § 53-208.42 states that the definition of money transmission “​​includes maintaining
control of virtual currency on behalf of others.” NC Gen Stat § 53-208.43 adds that “No person …
shall engage in the business of money transmission…without a license.” NC Gen Stat § 53-208.44
exempts “A person appointed by a payee to collect and process payments as the bona fide agent of
the payee” for “transactions conducted in whole or in part in virtual currency” from this licensing
requirement. Miners and blockchain software companies are exempt from such requirements. NC
Gen Stat § 53-208.47 states that businesses involved with “virtual currency transmission” may be
required to “obtain additional [​​surety bond] insurance coverage to address related cybersecurity
risks inherent in the applicant’s business model.” NC Gen Stat § 53-208.48 gives the Commissioner
of Banks the right to “request that [a] licensee verify…aggregate virtual currency transmission
obligations outstanding and virtual currency held as permissible investments, including virtual
currency stored offline” if a business has cryptocurrency investments. The North Carolina
Commissioner of Banks’ Money Transmitter Frequently Asked Questions addresses more specific
requirements.

Pending Legislation

North Carolina’s legislature is currently considering HB 631/SB 688, which includes “Digital, crypto,
and virtual currencies” under the definition of “Cash equivalent” for sports betting.

North Dakota

Cryptocurrency
North Dakota’s Department of Financial Institutions states that they do “not consider the control or
transmission of virtual currency to fall under the scope of [the North Dakota’s Money Transmission
Act]. However, any such company that also holds or transmits fiat currency will still need to secure a
money transmitter license.”

Blockchain

In 2019, North Dakota adopted three blockchain-related bills. HCR 3004 “request[s] the Legislative
Management to study the potential benefit value of blockchain technology implementation and
utilization in state government administration and affairs.” HB 1048 mandates that the Department of
Financial Institutions “research and develop the use of distributed ledger-enabled platform
technologies, such as blockchains, for computer-controlled programs, data transfer and storage, and
program regulation to protect against falsification, improve internal data security, and identify
external hacking threats…The department shall select a state agency…to serve as a pilot program for
the implementation and use of distributed ledger-enabled platform technologies.” HB 1045
recognizes signatures, records, and contracts secured through blockchain technology as legally
valid.

Ohio

Cryptocurrency

Ohio Rev Code § 1315.01 broadly defines money transmission as “to receive, directly or indirectly and
by any means, money or its equivalent from a person and to deliver, pay, or make accessible, by any
means, method, manner, or device, whether or not a payment instrument is used, the money
received or its equivalent to the same or another person, at the same or another time, and at the
same or another place,” which includes cryptocurrency transmission. Ohio Rev Code § 1315.02 states
that “No person” shall transmit money “unless that person…is a licensee.” The Ohio Department of
Commerce’s application for a money transmission license requires that virtual currency transacting
applicants “provide a current third party security audit of all relevant computer and information
systems.”

Blockchain

Ohio Rev Code § 1306.01 states that a record, contract, or signature “that is secured through
blockchain technology is considered to be” legally valid.

Pending Legislation

Ohio’s legislature is currently considering two bills relating to cryptocurrency. HB 348 makes
changes to the Unclaimed Funds Law to include virtual currency. HB 585 “create[s] a special
purpose depository institution charter,” “provide[s] for the formation and management of
decentralized autonomous organization LLCs,” “amend[s] the Uniform Commercial Code to address
the classification of and perfection of security interests in digital assets,” and “allow[s] banks to
provide custodial services of digital assets.”
Oklahoma

Cryptocurrency

6 OK Stat § 6-1512 defines a money transmitter as “any person who engages in the business of
accepting currency or funds denominated in currency, and transmits the currency or funds or the
value of the currency or funds, by any means” including through “an electronic funds transfer
network.” If this definition were interpreted to include cryptocurrency transactions, cryptocurrency
businesses would be required to hold a license under 6 OK Stat § 6-1513.

Blockchain

In 2019, Oklahoma adopted SB 700, which states that records, contracts, and signatures “secured
through blockchain technology” are considered legally valid.

Oregon

Cryptocurrency

OR Rev Stat § 717.200 defines money as “a medium of exchange that…Represents value that
substitutes for currency,” and money transmission as “selling or issuing payment instruments or
engaging in the business of receiving money for transmission, or transmitting money.” These
definitions likely include cryptocurrency. Therefore, cryptocurrency businesses fall under OR Rev
Stat § 717.205, which states that “A person…may not conduct a money transmission business
without a license.” In 2019, Oregon adopted HB 2488, which states that “Unless authorized by the
State Treasurer, the state government…may not accept payments using cryptocurrency.” It further
states that “A person may not make a contribution to a political candidate, a political committee or a
petition committee using cryptocurrency.”

Pennsylvania

Cryptocurrency

The Pennsylvania Department of Banking and Securities issued Money Transmitter Act Guidance for
Virtual Currency Businesses to clarify which businesses need licenses or other supervision. The
guidance states that “Virtual Currency Trading Platforms…are not money transmitters,” and that
“Virtual Currency Kiosks, ATMs, and Vending Machines…would not be money transmitters under the
MTA.” Therefore, neither type of cryptocurrency business is subject to the Money Transmitter Act or
its licensing requirements.

Pending Legislation

Pennsylvania’s legislature is currently considering several relevant bills. HB 1724 “Establish[es] a task
force on digital currency and the impact on widespread use of cryptocurrency and other forms of
digital currencies in this Commonwealth.” HB 2512 includes virtual currency in the definition of a
cash transaction for real property transactions. SB 399 and SB 401 relate to ethics standards and
financial disclosure requirements for public officers and include virtual currency in the definition of a
cash gift. SB 1053 requires that “The [Transportation Commission]…establish and maintain a system
for the payment of tolls or charges by an operator of a vehicle using alternative electronic payment
options” including “digital wallets, peer-to-peer money transfer systems and cryptocurrencies.” SB
1262 “Amends Title 27 (Environmental Resources) of the Pennsylvania Consolidated Statutes,
providing for emerging technologies” and defines cryptocurrency.

Rhode Island

Cryptocurrency

RI Gen L § 19-14-1 includes “maintaining control of virtual currency or transactions in virtual currency
on behalf of others” under the definition of currency transmission. RI Gen L § 19-14-2 states that “No
person shall engage within this state in the business of…Providing currency transmission for a fee or
other consideration…without first obtaining a license or registration.” RI Gen L § 19-14.3-1 lays out a
series of exemptions from this requirement. RI Gen L § 19-14.3-3.5 is a list of disclosures virtual
currency businesses must make to their customers. RI Gen L § 19-14.3-3.6 states that “​​A licensee
that has control of virtual currency for one or more persons shall maintain in its control an amount of
each type of virtual currency sufficient to satisfy the aggregate entitlements of the persons to the
type of virtual currency.” Rhode Island’s Department of Business Regulation has posted further
guidance in the Rhode Island Currency Transmission Law: Frequently Asked Questions.

Pending Legislation

HB 7254 “would establish an economic growth blockchain act,…regulate virtual and digital assets,
and establish depository banks for these purposes.” HB 8152 includes a “green coin” cryptocurrency
as part of “The Green Housing Public-Private Partnership Act.”

South Carolina

Cryptocurrency

The South Carolina Attorney General’s Money Services Division stated in a 2018 interpretive letter
that “​​virtual currencies lack the characteristics of mediums of exchange. Therefore, it is the view of
the Division that virtual currencies alone do not qualify as monetary value. However, to the extent
that virtual currency transactions also involve the transfer of fiat currency, they may be subject to
money transmission regulations under the [South Carolina Anti-Money Laundering] Act.” The same
letter stated that “​​activities as they relate to virtual currencies do not require a license under the Act.”
The Attorney General stated in Administrative Order Number MSD-19003 that “When an ATM does
not act as a third party, and only facilitates a sale or purchase of virtual currency by the ATM
operator directly with the customer…no license is required under the Act.” However, “​​The exchange
of virtual currency for fiat currency through an ATM that acts as a third party exchanger that
facilitates contemporaneous exchanges of virtual currency for fiat currency…is money transmission
and requires a license under the Act.” The South Carolina Attorney General’s Money Services
Division has posted further guidance on their Money Services FAQs page.
Blockchain

In 2020, South Carolina’s Senate adopted SR 1158 “to acknowledge the importance of emerging
blockchain technology and to call upon the residents of south carolina to join in encouraging the
promotion of blockchain technology in our state.”

South Dakota

Cryptocurrency

SD Codified L § 51A-17-1 broadly defines monetary value as “any medium of exchange, whether or
not redeemable in money,” and money transmission as “engagement in the business of the sale or
issuance of payment instruments or stored value or of receiving money or monetary value for
transmission.” The South Dakota Division of Banking stated in 2019 that “virtual currencies, including
cryptocurrencies like Bitcoin, are ‘monetary value.’” Therefore, cryptocurrency businesses fall under
SD Codified L § 51A-17-4, which states that “No person…may engage in the business of money
transmission…without obtaining a license.” On February 8, 2022, Governor Kristi Noem signed SB 47,
which “revise[s] certain provisions regarding money transmission” including adding a requirement
that “​ licensee[s] transmitting virtual currencies shall hold like-kind virtual currencies of the same
volume as that held by the licensee but that is obligated to consumers.”

Blockchain

SD Codified L § 53-12-1 defines blockchain technology. It also “includes a record that is secured
through blockchain technology” under the definition of electronic record, and “includes a signature
that is secured through blockchain technology” under the definition of electronic signature.

Tennessee

Cryptocurrency

The Tennessee Department of Financial Institutions issued a memo in 2015 entitled Regulatory
Treatment of Virtual Currencies under the Tennessee Money Transmitter Act. It stated that
“cryptocurrency is not money under the Tennessee Money Transmitter Act” and “receiving it in
exchange for a promise to make it available at a later time or different location is not money
transmission…However, when a cryptocurrency transaction does include sovereign currency, it may
be money transmission depending on how the sovereign currency is handled.” The guidance went
on to say “The exchange of cryptocurrency for sovereign currency between two parties is not money
transmission…Exchange of one cryptocurrency for another cryptocurrency is not money
transmission…Transfer of cryptocurrency by itself is not money transmission…Exchange of
cryptocurrency for sovereign currency through a third party exchanger is generally money
transmission…Exchange of cryptocurrency for sovereign currency through an automated machine is
usually but not always money transmission.” Cryptocurrency businesses whose activity is deemed
money transmission would be required to hold a license under TN Code § 45-7-102. TN Code § 66-
29-102 includes virtual currency as property under Tennessee’s Uniform Unclaimed Property Act. SB
535 was signed into law on April 14, 2022, and states that “a governmental entity shall not pay,
compensate, award, or remit funds in the form of, or facilitate directly or indirectly the conversion of
compensation or funds to, blockchain, cryptocurrency, non-fungible tokens, or virtual currency to an
individual person, corporation, or other entity without the prior written approval of the state
treasurer.” Local governments are also forbidden from “procur[ing] services for the performance of
the” above-stated actions.

Blockchain

In 2018, Tennessee enacted SB 1662, which states that “Smart contracts may exist in commerce. No
contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because
that contract is executed through a smart contract.” It further states that records, contracts, and
signatures secured through distributed ledger technology are legally valid. It also confirms that “a
person that…uses distributed ledger technology to secure information that the person owns or has
the right to use retains the same rights of ownership or use with respect to that information as
before the person secured the information using distributed ledger technology.” On April 20, 2022,
Governor Bill Lee signed HB 2645, which lays out provisions for governing Decentralized
Autonomous Organizations (DAOs).

Texas

Cryptocurrency

The Texas Department of Banking issued Supervisory Memorandum 1037 in 2019. It stated that
“Exchanging virtual currency for sovereign currency is not currency exchange under the Texas
Finance Code” and “no currency exchange license is required in Texas to conduct any type of
transaction exchanging virtual with sovereign currencies.” The memo further states that
“cryptocurrency is not money under the Money Services Act” and “receiving it in exchange for a
promise to make it available at a later time or different location is not money transmission.” More
specifically, the memo advises that “Exchange of cryptocurrency for sovereign currency between
two parties is not money transmission…Exchange of one cryptocurrency for another cryptocurrency
is not money transmission…Transfer of cryptocurrency by itself is not money transmission…
Exchange of cryptocurrency for sovereign currency through a third-party exchanger is generally
money transmission…Exchange of cryptocurrency for sovereign currency through an automated
machine is usually but not always money transmission.” The memo distinguishes stablecoins as
possibly being “considered money or monetary value under the Money Services Act” and thus
“receiving it in exchange for a promise to make it available at a later time or different location may be
money transmission.” Cryptocurrency businesses that are deemed money transmitters must be
licensed under ​T X Fin Code § 151.302. In 2019, Texas enacted SB 207, which includes digital currency
under the definition of funds for money laundering offenses.

Blockchain

In 2019, Texas adopted two bills relating to blockchain technology. SB 1859 included blockchain in
the definition of electronic data systems under Texas’s Business Organizations Code. HB 4214/SB 64
requires state agencies to “​​consider using next generation technologies, including…blockchain
technology.”
Utah

Cryptocurrency

UT Code § 7-25-102 states that “money transmission…does not include a blockchain token.” Based
on this definition, cryptocurrency businesses would not be subject to licensing requirements under ​
UT Code § 7-25-201. UT Code § 67-4a-102 defines virtual currency as property under Utah’s Revised
Uniform Unclaimed Property Act. On March 24, 2022, Governor Spencer Cox signed into law two
bills relating to cryptocurrency. HB 456 “makes provisions related to the use of digital user assets to
make payments to participating government agencies and political subdivisions.” SB 182
“establishes a framework for the ownership of digital assets.”

Blockchain

HB 335, adopted on March 24, 2022, “creates the Blockchain and Digital Innovation Task Force” to ​
“develop knowledge and expertise about blockchain and related technologies” and “make policy
recommendations related to blockchain and related technologies.” In 2019, Utah enacted the
Blockchain Technology Act, which “defines and clarifies terms related to blockchain technology” and
“exempts a person who facilitates the creation, exchange, or sale of certain blockchain technology-
related products from [Utah’s Money 15 Transmitter Act].” That same year, Utah’s legislature adopted
HJR 19, a “Joint Resolution Directing a Study of Blockchain Technology.” Utah’s regulatory sandbox
was also created in 2019 under HB 378, “which allows a participant to temporarily test innovative
financial products or services on a limited basis without otherwise being licensed or authorized to
act under the laws of the state” and explicitly includes blockchain technology under the definition of
innovation.

Vermont

Cryptocurrency

8 V.S.A. § 2500 includes virtual currency in Vermont’s money transmission statute. 8 V.S.A. § 2502
requires money transmitters, including cryptocurrency businesses, to obtain a license. 8 V.S.A. §
2541 states that “virtual currency owned by the licensee” is a permissible investment for money
transmitters, “but only to the extent of outstanding transmission obligations received by the licensee
in identical denomination of virtual currency.” On May 27, 2022, Governor Phil Scott signed HB 515,
which states that kiosks “where a consumer may access money transmission services, including
buying or selling virtual currency” must be registered and licensed, and are subject to certain
disclosure requirements. In 2019, HB 550 included virtual currency in the definition of property under
Vermont’s Revised Uniform Unclaimed Property Act.

Blockchain

12 V.S.A. § 1913 states that “A digital record electronically registered in a blockchain…shall be

considered a record of regularly conducted business activity pursuant to Vermont Rule of Evidence
803(6) unless the source of information or the method or circumstance of preparation indicate lack
of trustworthiness.” It also states that “A digital record electronically registered in a blockchain shall
be self-authenticating pursuant to Vermont Rule of Evidence 902, if it is accompanied by a written
declaration of a qualified person, made under oath.” In 2017, Vermont adopted two bills related to
blockchain technology. SB 135 states that “The existing Vermont legislation on blockchain
technology and other aspects of e-finance have given Vermont the potential for leadership in this
new era of innovation as well, with the possibility of expanded economic activity in the financial
technology sector that would provide opportunities for employment, tax revenues, and other
benefits.” SB 269 enabled the creation of “blockchain-based limited liability compan[ies],” which are
described as “​​limited liability compan[ies] organized…for the purpose of operating a business that
utilizes blockchain technology for a material portion of its business activities.” The bill also requires
the Department of Financial Regulation to “review the potential application of blockchain technology
to the provision of insurance and banking and consider areas for potential adoption and any
necessary regulatory changes in Vermont.”

Virginia

Cryptocurrency

In a 2021 Notice to Virginia Residents Regarding Virtual Currency, the Virginia Bureau of Financial
Institutions stated that the Bureau “does not currently regulate virtual currencies; however, to the
extent virtual currency transactions also involve the transfer of fiat currency… they may be regulated
under [VA Code § 6.2-1901].” On April 11, 2022, governor Glenn Youngkin signed into law HB 263,
which allows Virginia banks to “provide [their] customers with virtual currency custody services so
long as the bank has adequate protocols in place to effectively manage risks and comply with
applicable laws” and “provide virtual currency custody services in either a nonfiduciary or fiduciary
capacity.”

Washington

Cryptocurrency

WA Rev Code § 19.230.010 defines money transmission as “receiving money or its equivalent value
(equivalent value includes virtual currency) to transmit, deliver, or instruct to be delivered to another
location.” WA Admin Code 208-690-015 states that “Storage of virtual currency by a person when the
virtual currency is owned by others and the person storing the virtual currency does not have the
unilateral ability to transmit the value being stored” is “excluded from the [Uniform Money Services]
Act.” Therefore, only businesses that transmit cryptocurrency are required to be licensed under WA
Rev Code § 19.230.030. WA Rev Code § 19.230.040 states that, “For business models that store
virtual currency on behalf of others, the applicant must provide a third-party security audit of all
electronic information and data systems acceptable to the director.” WA Admin Code 208-690-030
has a similar provision. WA Rev Code § 19.230.200 states that “A licensee transmitting virtual
currencies must hold like-kind virtual currencies of the same volume as that held by the licensee but
which is obligated to consumers.” WA Admin Code 208-690-085 has a similar provision. WA Rev
Code § 19.230.370 and WA Admin Code 208-690-205 layout disclosure requirements specific to
virtual currency businesses. WA Admin Code 208-690-060 states that “The minimum tangible net
worth if the company provides virtual currency storage is one hundred thousand dollars,” which is
different from the net worth requirement for other money transmitters. Washington’s Department of
Financial Institutions has further guidance on their page entitled FinTech Licensing and Regulation
Guidance. On March 30, 2022, Governor Jay Inslee sign into law SB 5531, which includes virtual
currency in the definition of property under the ​Uniform Unclaimed Property Act. The Washington
Department of Revenue stated in 2019 that “Taxpayers must convert bitcoin [and other
cryptocurrency] to US dollars, prior to remitting payment to the Department of Revenue.” The
Department also gave tax guidance for accepting virtual currency in a sales transaction. In the same
2019 guidance statement, the Department announced a tax on Bitcoin mining “determined by the
value of the bitcoin at the time it is obtained by the miner.” In 2020, the State of Washington
Securities Division stated in a consent order that “The offer and/or sale of [ERC-20 tokens named
RHOCs]…constitute the offer and/or sale of a security as defined in [WA Rev Code § 21.20.005].” This
means that the unregistered offering violated WA Rev Code § 21.20.040.

Blockchain

In 2019, Washington enacted SB 5638, which “intends to encourage the development of distributed
ledger technology.” The bill defines blockchain, distributed ledger technology, and electronic record.
It states that “An electronic record may not be denied legal effect, validity, or enforceability solely
because it is generated, communicated, received, or stored using distributed ledger technology.”

West Virginia

Cryptocurrency

WV Code § 32A-2-1 broadly defines both currency transmission and money transmission as
“engaging in the business of…receiving currency, the payment of money, or other value that
substitutes for money by any means for the purpose of transmitting,” which seems to include
cryptocurrency. WV Code § 32A-2-2 states that “a person may not engage in the business of
currency exchange, transportation or transmission in this state without a license.” WV Code § 31A-
8G-1 creates the West Virginia Fintech Regulatory Sandbox Program. According to WV Code § 31A-
8G-4, a licensee of this Sandbox “is not subject to state laws that regulate financial products or
services.” WV Code § 61-15-1 explicitly includes cryptocurrency under the definition of monetary
instruments which are banned from being used to launder value. On March 26, 2022, Governor Jim
Justice signed HB 4511, which amends the ​Unclaimed Property Act to include provisions for the
treatment of virtual currency.

Wisconsin

Cryptocurrency

The Wisconsin Department of Financial Institutions states that “[WI Stat § 217.01] does not currently
give the Department the authority to regulate virtual currency. The division is therefore unable to
license or supervise companies whose business activities are limited to those involving virtual
currency. However, should the transmission of virtual currency include the involvement of sovereign
currency, it may be subject to licensure depending on how the transaction is structured.”

Wyoming
Cryptocurrency

WY Stat § 40-22-104 states that “Buying, selling, issuing, or taking custody of payment instruments
in the form of virtual currency or receiving virtual currency for transmission” is exempt from the
Wyoming Money Transmitters Act and its licensing requirements. WY Stat § 40-29 establishes the
Financial Technology Sandbox, which cryptocurrency businesses may join. WY Stat § 40-29-103
states that Sandbox participants “may be granted a waiver of specified requirements imposed by
statute or rule.” WY Stat § 40-29-106 and WY Stat § 40-29-104 offer specifics on applying to and
operating under the Sandbox. WY Stat § 13-12-101 establishes the Special Purpose Depository
Institutions Act. The Wyoming Division of Banking has stated that this act allows special purpose
depository institutions (SPDIs) “to receive deposits and conduct other activity incidental to the
business of banking, including custody, asset servicing, fiduciary asset management, and related
activities.” The Division further states that “SPDIs will likely focus on digital assets, such as virtual
currencies, digital securities and digital consumer assets. For example, SPDIs may elect to provide
custodial services for digital assets and, in accordance with customer instructions, undertake
authorized transactions on behalf of customers. SPDIs may also conduct activity under Wyoming
regulations tailored to digital assets, which address issues such as technology controls, transaction
handling, and custody operations for digital assets.” WY Stat § 34-29-101 is a statute entirely
dedicated to digital assets, which defines key terms, classifies digital assets as property, and gives
guidance for custodial services along with other aspects of digital asset businesses. WY Stat § 34-
29-106, the Utility Token Act, exempts utility tokens from Wyoming’s securities laws if certain
conditions are satisfied. In 2019, HB 62 was enacted to “establi[sh] that open blockchain tokens with
specified consumptive characteristics are intangible personal property and not subject to a
securities exemption.” The same bill lays out notification requirements and enforcement authorities
of the state regulator. That same year, HB 185 was adopted to allow “corporations to issue certificate
tokens in lieu of stock certificates as specified.” This collection of laws makes Wyoming arguably the
most cryptocurrency-friendly state in the country.

Blockchain

In 2018, Wyoming enacted HB 101, which “authoriz[ed] corporations to use electronic networks or
databases for the creation or maintenance of corporate records.” In 2019, Wyoming adopted two bills
relating to blockchain technology. HB 1 “created the blockchain task force.” HB 70 “authoriz[es] the
secretary of state to develop and implement a blockchain filing system.” In 2020, Wyoming enacted
two more bills relating to blockchain technology. HB 27 “creat[es] the select committee on
blockchain, financial technology and digital innovation technology.” SB 72 appoints “executive
branch liaisons” to “Develop and introduce legislation as necessary to promote blockchain, financial
technology and digital innovation in Wyoming.” On March 9, 2022, Governor Mark Gordon signed
into law SF 68, which “amend[s] statutory provisions regulating decentralized autonomous
organizations,” “amend[s] definitions,” “amend[s] the obligations of members and dissociated
members,” and “amend[s] factors for dissolution of a decentralized autonomous organization.”

State Blockchain Law or Cryptocurrency Law or No Law or Regulation (yet)

Regulation Regulation
Alabama X

Alaska X

Arizona X X

Arkansas X

California X X

Colorado X X

Connecticut X X

Delaware X

District of Columbia X

Florida X X

Georgia X

Hawaii X

Idaho X

Illinois X X

Indiana X

Iowa X X

Kansas X

Kentucky X X

Louisiana X

Maine X

Maryland X X

Massachusetts X

Michigan X X

Minnesota X

Mississippi X

Missouri X

Montana X

Nebraska X X

Nevada X X

New Hampshire X

New Jersey X X
 New Mexico X

New York X

North Carolina X X

North Dakota X

Ohio X X

Oklahoma X

Oregon X

Pennsylvania X

Rhode Island X

South Carolina X

South Dakota X X

Tennessee X X

Texas X X

Utah X X

Vermont X X

Virginia X

Washington X X

West Virginia X X

Wisconsin X

Wyoming X X

Draft for discussion. Not intended as legal advice. Updated as of June 23, 2022.

[1] See also dfpi.ca.gov/2015/01/27/dbo-commissioner-owen-clarifies-coinbase-exchanges-

regulatory-status-in-california/

[2]
See portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/1-15-2019.pdf,
portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/2-21-2019.pdf,
portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/2-22-2019-1.pdf,
portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/2-22-2019-2.pdf

[3] See portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/11-1-2018.pdf,

portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/2-1-2019.pdf,
portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/5-15-2019-2.pdf,
portal.ct.gov/-/media/DOB/Consumer-Credit-Licensing-Info/12-19-2019.pdf

[4]
See HB 2384, SB 3025, HB 2287, SB 2697, HB 2108, SB 3076
Joseph Jasperse
Student Director of The Stevens Center Blockchain Laboratory, The Wharton School

© Copyright The Wharton School, The University of Pennsylvania