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ARTICLE · 25 APRIL 2022

California DFPI: Virtual Currency Platform Activity Is Not Money Transmission

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Responding to a request for guidance regarding California's Money Transmitter laws, the California Department of Financial Protection and Innovation (DFPI)...

United StatesTechnology
Mark Kindelin
Mark Kindelin
Katerina (Katie) Mills
Katerina (Katie) Mills
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Highlights

Certain virtual currency and digital asset exchange services were not considered Money Transmission in the state of California

Without transmission to a third party, fiat and virtual currency transactions were not deemed Money Transmission

Closed loop transactions within digital asset platform were not Money Transmission under the MTA

Uncertainty remains with regard to digital asset wallets and custody accounts as "claims against the issuer" under the MTA

Responding to a request for guidance regarding California's Money Transmitter laws, the California Department of Financial Protection and Innovation (DFPI) determined that a digital asset trading platform that supports both the purchase and sale of digital assets as well as the exchange of cryptocurrencies was not a Money Transmitter under the California Money Transmission Act (MTA). 

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