The Pennsylvania Department of Banking and Securities recently
issued guidance under the Money Transmitter Act ("MTA") for
entities engaged in various forms of virtual currency business in
the commonwealth. The MTA, like similar statutes in other states,
requires entities engaged in a money transmitter business to obtain
a license, maintain minimum net worth standards, pay a surety bond,
be subject to periodic examinations, and take other actions to
safeguard customer funds. As we previously
reported, many of these statutes were not drafted with virtual
currency businesses in mind, which has created various compliance
challenges for the crypto community.
Importantly, the new guidance clarifies that only fiat currency,
i.e., currency issued by the United States government, is
"money" for purposes of the MTA. Thus, virtual currency,
including Bitcoin, is not considered "money" under the
MTA.
