Hawaii’s Regulatory Agency Allows Crypto Firms to Operate Without License After Policy Revision
The regulatory agency of Hawaii has removed the requirement for cryptocurrency firms to apply for a Money Transmitter License. The regulatory agency has revised the policy for the total number of licenses needed to operate for the local cryptocurrency organizations. However, as per the report, cryptocurrency firms have to follow the federal licensing policies.
The notification was issued by the Department of Commerce and Consumer Affairs (DCCA) for public benefit on 30th June. The notification also stated that these firms exempted from MTL application were inclusive of the Digital Currency Innovation Lab (DCIL).
DCIL Program
For context, DICL is a crypto research program that was initiated in 2020. The focus of the program is to access the state of the crypto sector and investment activities in the region and work on a regulatory framework for the firms operating in the industry.
According to the regulatory agencies, the DCIL project was now completed and thus the local firms do not need to apply for a MTL license to operate within the state. The statement was issued on 28h July 2024.
The officials have further stated that crypto firms can make transactions as unregulated businesses. As per a notification from DCCA, the crypto firms now have to account for handling matters such as federal licensing and registration.
Crypto Firms Still Need to Comply with Federal Policies
Cryptocurrency firms still have to comply with the regulatory requirements issued by federal regulatory agencies such as SEC and FinCEN. The DCCA notification declared that firms operating in the crypto sector are still under legal obligation to operate in accordance with the regulatory policies issued by the Securities and Exchange Commission, Financial Industry Regulatory Authority, and Financial Crimes Enforcement Network.
Furthermore, the regulator has retained that crypto firms have to comply with all applicable legal guidelines.
As per the notification, these guidelines are inclusive of consumer protection laws, anti-money laundering policies, and similar measures. The state money transmitter license regulations also comprise federal laws issued by the regulatory agencies of the United States.
These regulations warrant safety for regulators and ensure robust security protocols for the payment networks that are operating in 48 states.
The article has also stated that MTL licensing is a challenging process that requires the applicants to input considerable resources and investment. Some of these requirements are inclusive of but not limited to permissible investment monitoring, minimum net worth, compliance program, and a detailed business program.
As per the analysis of a legal expert from Deliendorf Law Firm, MTL noticed that MTL requirements differ for each state. Due to the perceived inconsistencies, businesses are inclined to prefer specified states over others.
Hawaiian Regulators to Promote Crypto Education and Awareness Programs
The regulators in Hawaii have also taken a proactive approach toward the matter of crypto investment awareness among its citizens. On this account, the DCIL bank commissioner Iris Ikeda has stated that it is important to ensure that investors have awareness of risks that are associated with crypto investments.
The commissioner further advised the investors to obtain complete information and conduct research before investing in any form of digital currencies. He further stated that the main focus of the regulatory agency now is to spread awareness about the potential risks involved with crypto investments.
The statement also mentioned a warning notification recently issued by the Federal Investigation Bureau to inform the public about any scams or defrauding schemes in crypto.
FBI issued the warning in June with an emphasis to tell crypto investors to refrain from sending money, avoid recovery series, and safeguard private data and information.
FBI issued another alert for public benefit earlier this year, noting to raise awareness among crypto investors regarding the dangers of crypto money transfer services that are not registered as Money Services Businesses. In May, the Senate of Hawaii has put together a task force to research and prepare a report regarding the crypto legislative framework.
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