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How to Setup an MSB in the USA

FinCEN USA has created new laws that will help improve the regulation and control of crypto-exchanges. All exchangers must obtain status of MSB to license their activities in America. It’s essential to understand not only a crypto-exchange is considered an exchanger, but also other companies that want to provide such services. Now exchanges in the States will be more tightly controlled, and obtaining a license will become more difficult.

Our specialists are ready to provide you with comprehensive practical and advisory assistance in registration of an MSB in the USA. We will accompany you at all stages of this process and select the best option for opening your business. We also have an extensive inventory of shelf companies for sale in hundreds of jurisdictions and business-destinations.

Crypto-exchange features

Exchanger has the right to accept, transfer and buy and sell virtual money and is subject to regulation by FinCEN.

Companies that have been licensed for this service must file reports with the regulator on distrustful operations in excess of $2,000. Such operations include all ones could have occurred illegally or do not have a reasonable explanation for their conduct.

What kind of license does MSB need for registration?

Type of permit needed depends entirely on list of services organization is going to offer to customers. If there’s a crypto-exchange for ordinary monetary means, you need to get permission from Money Transmitter Authority. If exchange will be only between digital assets, then you get an MSB License. In the second option, the company will need to comply not only with a general list of rules, but also take into account peculiarities of laws where company is established.

Features and requirements for MSB in United States

If an enterprise wants to conduct any transaction that is related to cryptographic currencies, but has still licensed its activities, it has the status of MSB. The next thing to do is licensing. Companies with permission to exchange crypto are needed to perform next-mentioned actions:

  • be registered in the state treasury;
  • give regulator with a list of all agents and employees who are responsible for conducting financial operations;
  • keep all operations under control and report to regulatory body if distrustful ones are identified;
  • save information and give reports on operations exceed 10 thousand dollars;
  • comply with rules for prevention of illegal monetary means circulation and supporting of terrorism.

Owners of enterprise must submit their fingerprints to register them in common system. Sometimes employees need to pass such a procedure.

AML-program requirements

MSBs are required to implement AML/CTF program. It’s provided to avert illegal money circulation or terrorism supporting. It’s mandatory to hire person to ensure compliance with normative rules of BSA. AML policy for setting MSB should:

  • written policies and mechanisms for continued compliance;
  • appoint a dedicated compliance officer;
  • staff training standards, including the detection of distrustful operations;
  • conducting review to keep program up to date.

It is also prohibited to do business with persons on the SND List. The assets of any such person should be blocked/frozen.

AML laws apply to decentralized financial systems, such as decentralized exchanges in the form of smart contracts placed over the blockchain, as well as public open source client interfaces (such as Uniswap). Cryptocurrency fund managers may be required to register as commodity trading advisors or commodity pool operators, depending on the types of contracts they enter into.

Features of obtaining a permit for crypto-exchange in United States

  1. Firm needs to follow all laws of country and states in which it is registered. For example, in New York, you need to obtain an additional permit for operations with cryptographic currency BitLicense.
  2. If business will operate overseas, you can only be licensed in one state. This makes it possible to choose a place with the most loyal conditions.
  3. There isn’t crypto-license in some states of America, for example, in Montana, New Mexico and South Carolina.
  4. In Hawaii, you can register a crypto currency exchanger with an authorized capital of at least $1,000, while in Pennsylvania, for example, a small company cannot obtain permission to operate, because here the minimum capital of a company must be from $1 million.

Basic documents for setting and licensing a crypto-exchanger

  1. Denomination, state and legally-approved address.
  2. Trademarks used to offer any kind of service for exchanges of digital assets.
  3. Information about bankruptcy, if any, and a complete list of all violations that have been identified in the company for a certain time (the period depends on the state).
  4. Data about courts concerning founders of enterprise (if any).
  5. Services related to finance and exchange.
  6. Data on employees and agents who will conduct any transaction with crypto assets.
  7. Special form for the contract to be concluded with users.

Getting a permit for cryptocurrencies in America is a rather difficult procedure differing in each state. To find the conditions being most suitable for your company, we advise you to seek help from our experienced specialists. This will save you time, costs, and minimize all possible risks.

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