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The short answer is (in California at least) it's a huge pain in the ass to comply with money transmission laws. You definitely need a lawyer. You might need a
by andrewfong 13y ago
The short answer is (in California at least) it's a huge pain in the ass to comply with money transmission laws. You definitely need a lawyer. You might need a large amount of capital to backstop the business. You should also keep in mind that there is some uncertainty over what the law entails right now (hence the need for a lawyer), especially with respect to bitcoin. There is at least one ongoing lawsuit over California's money transmission laws.
California info: http://www.dbo.ca.gov/Licensees/money_transmitters/ http://www.dbo.ca.gov/Licensees/money_transmitters/
Other states will have their own requirements. Depending on the nature of the business, you may have to interact with the SEC and FINRA. Again, get a lawyer.
- foobarqux 13y agoAre there any small companies that may superficially appear to be money transmitters but are not?
- andrewfong 13y agoThe law here is uncertain and differs between states. Until we get some definitive court rulings or clarification from regulatory agencies, it's hard to say. There is one reading of California's law where practically anything that takes money from A and gives money to B is a money transmitter. Therefore, Uber (which takes money from passengers and gives it to drivers) or iTunes (which takes money from customers and gives it to artists) could be money transmitters. This is probably not the case (or at least, the law isn't being enforced that way), but it's far from settled. See http://www.businessinsider.com/california-rethinks-money-transmission-act-2013-3 http://www.businessinsider.com/california-rethinks-money-tra....