Bitcoin compliance and avoidance strategies from the Chairman of the Bitcoin Foundation

12/12/2013 - 00:00

My name is Marco Santori. I’m a business attorney for technology companies. In particular, I represent digital currency businesses. I am also the Chairman of the Bitcoin Foundation’s Regulatory Affairs Committee. In this multi-part series, I will give a basic primer on the state of US law as it applies to digital currency entrepreneurs. I aim to help bitcoin businesses assess their risks and develop an informed business model.

In the first two parts of the series, we covered the law of money transmission on the federal and state-level in the United States. We learned that not all digital currency businesses need to register or obtain a license, but for those that do, the process can prove expensive and time-consuming.

So, how can a business effectively comply with the registration and licensing requirements? What alternatives exist? How can a business avoid them altogether?

You can seek licenses, but it’s expensive.

The first and most obvious option for complying with state and federal requirements is to register with FinCEN and seek licenses from each of the states in which your customers reside.

Registration with FinCEN is a fairly simple exercise: 15 minutes and a few mouse clicks on FinCEN’s website will satisfy that obligation. The real burden here comes from the ongoing costs of compliance, like verifying customer information and filing Suspicious Activity Reports.