California DFPI: Virtual Currency Platform Activity is Not Money Transmission
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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