Rhode Island Approves Money Transmitter Guidelines For Crypto Businessesbr>
Rhode Island, a US state in New England, has approved regulations that will allow cryptocurrencies to be overseen by money transmitter laws.
International law firm Alston and Bird reported that on July 15, Rhode Island’s governor Gina Raimondo signed House Bill 5847, which clarifies that certain cryptocurrency business activities will be subject to the state’s money transmitter regime. The new law, which also adds provisions to the current law related to currency transmissions and licensing requirements, will be applicable to businesses entities that accept currency transmission fees and hold control over virtual currencies starting January 1, 2020.
“No person except those exempt pursuant to § 19-14.3-1 shall engage in the business of currency transmission in this state without a license as provided in this chapter,” the bill said. “A currency transmission licensee may conduct its business in this state at one or more locations, directly or indirectly owned, or through one or more authorized delegates, or both, pursuant to the license granted under this chapter. A person is considered to be engaged in the business of currency transmission in this state if that person enters into a transaction with a person physically located in or resident in Rhode Island at the time the transaction is initiated.”
The new law requires firms to maintain cryptocurrency holdings in kind and quantity, equivalent to the amount being transmitted by clients. It also mandates crypto firms to provide certain specified disclosures to residents and create compliance programs such as information security and operational security, business continuity, disaster recovery, anti-fraud, and anti-money laundering. The new law also provides several exemptions from licensure requirements, including for persons using virtual currency for personal, family or household purposes.
Crypto companies are also required to demonstrate an operational ability to “protect the confidentiality, integrity, and availability of any non-public personal information or currency transmission it receives, maintains, or transmits.”