The buzz for having a proper regulation related to cryptocurrencies in the United States has been there for a long period. However, there has not been a consistent approach towards the administration of cryptocurrencies in the United States. The Financial Crimes Enforcement Network (FinCEN) doesn’t consider cryptocurrencies to be legal tender but since 2013 has considered exchanges as money transmitters (subject to their jurisdiction) on the basis that tokens are “other value that substitutes for currency”.
One of the major authoritative body is the U.S. Securities and Exchange Commission which is an independent agency of the United States federal government. The agency is also responsible for the regulation related to crypto. The laws related to crypto exchanges vary by state and federal authorities actually differ in their definition of the term ‘cryptocurrency’.
Recently, the Department of Regulatory Agencies in the State of Colorado issued an “Interim Regulatory Guidance” for cryptocurrencies. The trading of cryptocurrencies is to be outlined with these regulatory guidelines.
The official statement is given in this regard:
“This guidance outlines the Division of Banking’s interpretation of the Colorado Money Transmitters Act (the “Act”) as it relates to whether a person1or organization engaged in the business of buying, selling and/or facilitating the transfer of cryptocurrency within the state is required to be licensed as a money transmitter under Colorado law.”
The Colorado Money Transmitters Act will also define the money transmission and identify the types of cryptocurrency transactions which fall under this act.
According to the Money Transmitters Act, a person involved in the transmission of money within the United States or abroad by any means will be required to obtain a license from the State Banking Board. Under this act, the department stated that the cryptocurrency transactions are not recognized as legal tender, therefore, the transaction between individuals do not require a license as stated by the act.
Also, the crypto to crypto transactions, as no fiat currency is involved, does not fall under the definition of money transmission. An individual’s business may be required to obtain a license under the ‘Money Transmitters Act’ if fiat is included.
The decision was supported worldwide and the crypto enthusiasts tweeted in accordance with this;