If you want to conduct business as a money transmitter in a certain state, your Company may be required to obtain a license in said state. Federal and state regulations are strict regarding all types of monetary transmissions, and you must first obtain the proper license and authority before you can work in this type of business.
The AML compliance experts at Bates are familiar with the complex regulations and state licensing requirements for money transmitters. We assist clients in obtaining their money transmitter license, as well as with compliance following licensure and the start of operations.
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Every state has its own definition of what constitutes a “money transmitter,” which means it can be difficult to know whether you need a license for your company’s operations. For example, some states exempt digital currency operations from needing a license, while other states do not. We can evaluate your situation and advise whether we believe you need a license for your particular business model.
Generally speaking, any party that completes transactions over $1,000 in a day can qualify as a money transmitter if the transactions include:
To be on the safe side, let us evaluate your licensing requirements for your intended operations.
Once you determine that you need a money transmitter license, you must meet specific requirements, which can vary significantly from state to state. Some common requirements in most states may include:
Applications also can require a substantial amount of supporting documentation. This can include a detailed business plan that details the financial health and intended operations of the business, financial statements and records for shareholders and directors, and your background check information. In addition, you will need to present your anti-money laundering (AML) policies and procedures that are in line with the requirements enforced by the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Department of Treasury.
In order to obtain and maintain your money transmitter license, your state will likely conduct thorough examinations of your business and all owners, including reviewing detailed financial records of the company. Bates conducts mock state examinations to identify any potential issues that might cause a delay, denial, or suspension of your license. This is a key part of the licensing process that can halt your application if your business affairs are not completely in order.