Crypto money transmitter licenses: who needs one?
Crypto businesses that transmit convertible virtual currency for others need a state money transmitter license, through NMLS or New York's BitLicense.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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If your crypto business sends, receives, or exchanges funds for other people, you likely need this license. The trigger depends on what you control and whether you act for yourself or for customers.
Do crypto businesses need a license?
Yes, if they transmit convertible virtual currency for others. Acting as an intermediary for customers generally requires money transmitter licensure. Starting in 2019, regulators placed virtual-asset service providers under anti-money-laundering and counter-terrorist-financing rules.
Which crypto activities are covered?
Exchanging crypto for fiat or transmitting it for customers is money transmission. Software developers, miners, and users transacting for themselves generally are not.
Which federal agency regulates?
FinCEN requires money services businesses to register under the Bank Secrecy Act. A money transmitter is usually a type of MSB. This registration is federal.
What state licenses are required?
States set their own licensing rules. Most use a common system, and New York has a separate license.
What happens without a license?
Operating without a required license can bring fines, injunctions, or criminal liability.
- State fines for unlicensed activity
- Injunctions that stop operations
- Criminal charges in some cases
Frequently asked questions
Usually no, if you are a merchant selling your own goods or services. If you transmit funds for others, different rules can apply.
No. FinCEN registration under the Bank Secrecy Act is federal, and most states require a separate state license.
Usually yes. A crypto ATM that lets customers buy or sell crypto with cash or card is transmitting funds for others, so it generally needs licensure.
A money transmitter license is a state-level permission in most states, usually through NMLS. New York's BitLicense is a separate license for virtual currency business activity.
