Justin Wales and Arnaldo Rego, lawyers at Carlton Fields, have surveyed all 50 states in the US, looking for clarity on money transmitting laws as they relate to cryptocurrencies. As adoption and general usage increases, states appear to be failing to keep up, leaving many enthusiasts to wonder if they’re committing a crime.
Also read: Square’s Big Week: Crypto Patent, Shares Leap, and Lightning Plug
In Nearly Half of the US, Crypto Enthusiasts Cannot be Sure of the Law
Of 50 US states, 12 have been judged “unclear” in terms of money laundering laws and how they relate to cryptocurrency. That’s significant due to the way enthusiasts have been prosecuted in the United States by regulators. Legal researchers from the law firm Carlton Fields examined all 50 states, and Washington, DC with regard to cryptocurrency law.
A tad better than “Unclear,” 11 additional states were deemed “likely not applicable to cryptocurrencies” in their money laundering laws, making a combined half of the country a decidedly risky place for those who exchange regular amounts.
“There was a time when it made a lot of sense for states to regulate money transmission,” legal researchers note in their examination, “or the business of transferring funds, currency, or other substitutes of money. In a pre-digital economy, almost all money transmitter businesses had to be physically located in the state where they offered payment or financial services for its residents, such as facilitating the payment of electric bills or exchanging currencies before a trip.”
Borderless
Digital currencies are almost by definition borderless, zapped around pocket to pocket through smartphones, laptops, desktops, tablets without thought about jurisdiction. Indeed, researchers underscore how “in the crypto era, state-by-state money transmitter rules just make things
