Bitcoin Money Transmitter License Guide

Throughout the world, the idea of using money to pay for goods and services is not a complicated thought for consumers. On the business side of transactions, the movement of money can become more complex, especially for companies that operate as money transmitters.

While there is no hard and fast definition of a money transmitter that covers all businesses, a broad definition exists – a money transmitter is an individual or company that transfers funds or provides payment services.

In most states, anyone who receives money for the purpose of transmitting it to another location by wire, fax, payment instrument, or electronic transfer is categorized as a money transmitter. Most money transmitters work within money services businesses, or MSBs, which are companies that convert or wire money.

Some well-known money transmitters include Western Union, MoneyCorp, and PayPal. There are licensing requirements that extend to those businesses that act as money transmitters that must be followed in order to operate legally in the United States.

Table of contents:

Regular Money Transmitter vs. Bitcoin Money Transmitter

To fall under the category of a regular money transmitter, a business must engage in the process of receiving money, or monetary value, for current or future transmission. Under these terms, that means fiat money is transmitted. This is the currency we all know and use on a day to day basis.

Bitcoin money transmitters different in that they operate in the realm of digital currencies, not fiat currency. This does not mean those who invest in Bitcoin or other cryptocurrencies are money transmitters. Only businesses that exchange virtual currency for real currency, or for other virtual currency, are considered money transmitters.

Why Do You Need a Cryptocurrency Money Transmitter License?

If you are exchanging digital currency like Bitcoin for real currency, such as though a Bitcoin ATM, you’ll likely need a cryptocurrency money transmitter license. Although each state has its own rules and regulations surrounding which businesses are required to have money transmission licenses, there are federal mandates enforced by the Financial Crimes Enforcement Network, or FinCEN.

The purpose of getting a license to transmit money, either in fiat or digital form, is to help the federal government prevent money laundering and fraudulent activity when money is transmitted.

Should Your Business Get a Cryptocurrency License?

Getting a cryptocurrency license as a money transmitter may not be a requirement for your business. The rules for money transmission licensing are clear for non-cryptocurrency businesses, but the rules are less defined, if they are defined at all, for digital currency money transmitters.

Because state laws have yet to catch up with the times, here are a few scenarios where you may or may not need a cryptocurrency money transmitter license to help provide some guidance. If you are still unsure, keep reading our guide and to determine what licensing requirements are necessary, and how your state views digital currency money transmission.

  • If you exchange Bitcoin for goods and services, you may not need a money transmitter license.
  • If you accept Bitcoin from one person and send it to another as a business, you likely need a money transmitter license.
  • If your business exchanges fiat currency for bitcoins, or bitcoins for another type of digital currency for customers, you likely need a money transmitter license.
  • If you operate a business as a payment processor that accepts bitcoins from a merchant’s customers, but pay that merchant in fiat currency, you likely need a money transmitter license.

What if Your Bitcoin Business Isn’t Licensed?

If you fail to license your business as a digital currency money transmitter, you could be in for a world of financial and legal trouble. Federal agencies, like FinCEN, the FBI, and the Treasury Department, are taking a close look at cryptocurrency businesses that move money from one person to the next, including Bitcoin ATMs.

If the business is not licensed to transmit money, business owners could face time in prison for evading federal or state anti-money laundering laws, as well as significant fines and penalties. This is why it is crucial to recognize and follow through with money transmitter licensing requirements for your cryptocurrency business early in the process.

Money Transmitter License as a Requirement for Operating Your Own Bitcoin ATM

Bitcoin ATMs are becoming a popular form of business throughout the world, with an estimated 3,000 now in operation. More and more business-minded individuals are seeing the growth of digital currencies and creating companies that offer services to investors. Bitcoin ATMs, even though they deal with cryptocurrency, are not free from money transmitter license requirements. Here’s what you need to do if you’re thinking about opening a Bitcoin ATM.

Identify Money Transmitter Requirements

The first step in setting up a Bitcoin ATM business is to understand state and federal money transmitter requirements. Because some states have yet to include digital currencies into their money transmitter laws, this can be a challenge. However, the non-profit Coin Center has an up-to-date regulatory tracker for state laws relating to digital currency and money transmission. You can also view our most recent state regulations listed later in this guide to see what you may need in terms of a money transmitter license for your Bitcoin ATM business.

Register as a Money Services Business

In addition to understanding the Bitcoin laws in your state, you also need to register as a money service business, or MSB. This is a federal mandate through FinCEN, and while it sounds daunting, it is often the easiest part of the licensing process for a Bitcoin ATM business. Companies wishing to operate a digital currency ATM need to complete the registration process through FinCEN’s online platform, which usually takes less than an hour from start to finish.

When you register as an MSB, you agree to the regulatory guidelines of FinCEN, and you have specific requirements to fulfill in order to stay in compliance. This may mean having an anti-money laundering program in place, and having a reporting system that tracks suspicious activity or details of transactions over a $10,000 threshold.

Implement an AML (Anti-Money Laundering) Program

Part of the requirements laid out by FinCEN for Money Service Businesses is the creation and implementation of an anti-money laundering program, or AML program. An effective AML program must be written and reviewed periodically, and it should address several factors that help prevent a Bitcoin ATM from being used to facilitate money laundering activities. Your AML program should include the following:

  • Policies, procedures, and internal controls that are designed to comply with the Bank Secrecy Act. These may include screening systems and transaction monitoring programs to capture customer patterns or activity.
  • A compliance officer who is responsible for remaining compliant with BSA and AML policies and procedures.
  • Training and education for anyone connected to the Bitcoin ATM as an employee or officer of the company. This training should include information about red flags that may constitute money laundering activities.
  • Audit and review of the AML program at least once per year.

United States Bitcoin Regulations

Throughout the world, e-money like Bitcoin and other cryptocurrencies have created a media buzz for their perceived worth and potential disruption of financial markets and frameworks as we know it. However, some countries are pushing ahead with regulations and oversight for digital currencies than others.

The United States currently does not view Bitcoin as a legal tender, but instead a commodity which can be purchased, sold, and exchanged. When it comes to Bitcoin businesses such as ATMs, the regulatory framework is much more complex and confusing, as there are not clear guidelines on who is the lead regulator or if states should hold the power in determining money transmitter licensing rules.

Money Transmission Laws in the US

Who is Classified for Money Transmission License?

Although the federal government does not consider cryptocurrency a legal tender in the United States, there are still money transmission laws that impact potential digital currency businesses. According to FinCEN, money transmitters who require a license from a federal perspective include the following:

Any business that conducts more than $1,000 in business with one person in one or more transactions in the same day in one or more of the following services:

  • Money orders
  • Traveler’s checks
  • Check cashing
  • Currency dealing or exchange
  • Money transfer services in any amount

From a federal standpoint, digital currencies exchanged for fiat currencies fall firmly within these guidelines, and so businesses offering these services are considered money transmitters.

Licensing and Regulatory Framework

Some of the confusion around Bitcoin ATMs and other e-money businesses in the United States is the complex regulatory system that involves both state and federal regulators. On the federal level, FinCEN is the main overseer of digital currency businesses that are operating as money transmitters.

However, the Securities and Exchange Commission (SEC) also has some skin in the game when it comes to Bitcoin and digital currency investments and trading. The Commodities Futures Trading Commission (CFTC) also has a role to play, given digital currency is classified as a commodity currently.

How to Obtain Cryptocurrency Money Transmitter License

If you determine that a money transmitter license is required for you to operate a virtual currency business in your state, there are specific steps you need to take in order to get your license. You can take a look at the state-by-state cryptocurrency regulations in our list below.

Determine Whether You Meet Money Transmission License Requirements

Each state has its own requirements for becoming a licensed money transmitter, and they vary significantly. However, the common requirements include the following:

  • Complete a license application that includes the address of the business, tax identification number, social security number of the owner/control persons, and net worth statement
  • Pay fees associated with the license application
  • Meet the minimum net worth requirement set out by the state
  • Complete a background check
  • Provide a form of security, such as a surety bond

Before starting the application process, it is necessary to evaluate your ability to meet the requirements of becoming a money transmitter in your state.

Choose the State You Want to Be Licensed In

Completing your registration as a money transmitter on the federal level is done through FinCEN. The process is relatively easy and quick via the organization’s online platform. While submitting this information is not time-consuming or expensive, the state’s process for becoming licensed can be more cumbersome. Check with your state to see what information is needed as part of the state-specific requirements so you can determine where you will operate your business.

Collect and Submit the Paperwork

If you determine you can meet the requirements, you will need to gather all the information and supporting documentation necessary for your application. This may include financial statements for your personally as well as the business, state business registrations or tax identification numbers, and insurance and bonding certificates. Once compiled, you will then submit your completed application to the appropriate state agency for review and approval.

Obtain Your Cryptocurrency Money Transmitter Bond

Part of the money transmitter licensing process for virtual currency businesses is obtaining a money transmitter bond. A surety bond is a form of protection that ensures the company will abide by money transmitter regulations as it performs its daily business activities.

The money transmitter bond requirement regarding the amount of the bond is dictated by the state and can range from $100,000 up to $500,000.

To apply for your bond, work with a surety agency that understands the money transmitter business as well as virtual currency companies. Your surety agency will ask for detailed information about the state in which you plan to operate, your financial condition and net worth, and your business financial details.

You’ll need to have this information organized and up to date to qualify for a money transmitter bond. Once these details are submitted to your surety agency, they will provide you with an approval and the cost of your money transmitter bond. You can take a look at the most frequent surety bond related questions. title="Get a FREE Money Transmitter Bond Quote"

How Much Does an E-Money Transmitter Bond Cost?

In addition to licensing and application fees for money transmitter businesses, you need to be aware of the potential cost of your money transmitter bond. Like other surety bonds, money transmitter bonds are priced as a percentage of the total bond amount, ranging between 1 and 10% for most applicants. The higher your bond amount, the most costly your bond will be. In addition to the amount of the bond, your personal and business financials play a role in how much your money transmitter bond will cost.

Surety agencies look at your financial track record to see how much of a risk you present as a potential bondholder. If you have a history of late payments, bankruptcies, or court judgments against you or the business, you are likely to pay a higher percentage of the total bond amount. Be sure to keep these cost factors in mind as you apply for your money transmitter bond for your digital currency business.

State-by-State Cryptocurrency Regulations

The federal rules for money transmitter businesses like Bitcoin ATMs are murky at best, but state legislation is a completely different story. To ensure your digital currency business is operating legally, you will need to know how your state perceives your business activities, and what licensing requirements may come thanks to this perception.

Below is a state-by-state guide to current cryptocurrency regulations to help you determine your next steps for licensing and business registration.


Alabama has a Monetary Transmission Act, in effect of as 2017, that defines virtual currency as a method for transmitting monetary value. This means that businesses operating in digital currency transmission likely need to be registered under money transmission regulations.


Money transmission laws in Alaska do not mention virtual currency, meaning the Division of Banking and Services in the state does not have authority to regular digital currency transmissions. However, a cryptocurrency business needing a money transmitter license by complete a limited license agreement that allows the state to regulate fiat currency transactions by the business.


There are no current guidelines for virtual currency businesses in Arizona. Money transmitter laws are in place, but they do not mention e-currency. However, a money transmitter license may be required for those who plan to exchange cryptocurrency for fiat currency.


No current guidelines exist for digital currency businesses in Arkansas. However, a money transmitter license may be required if digital currency is exchanged for fiat currency.


California laws do not currently define virtual currencies as part of regulated money transactions. However, legislation is in the works to more clearly define the eligibility, application requirements, and reporting requirements for companies that deal in digital currency.


Similar to California, Colorado does not have published definitions for virtual currency businesses and their need to get a money transmitter license. However, recent legislation was considered to help establish these guidelines for virtual currency businesses.


Virtual currencies have been added to the criteria for regulation of money transmitters in Connecticut. The Department of Banking manages the licensing process of money transmitters, including digital currency businesses like Bitcoin ATMs.


Money transmission laws in Delaware do not currently mention virtual currency businesses, and there are no current guidelines published. However, a license is likely required for companies that exchange digital currency for fiat currency.


The Department of Insurance, Securities, and Banking in the District of Columbia does not mention virtual currency under money transmission regulations. However, any business operating as a money transmitter with digital and fiat currency likely has to register and be licensed.


Florida regulations through the Office of Financial Regulation do not mention virtual currencies or offer guidelines on money transmitter licensing for digital currency businesses.


The Department of Banking and Finance in Georgia does include virtual currencies under its money transmission regulations. This means a license is required if a digital currency business falls under the money transmitter definition.


The Division of Financial Institutions in Hawaii ruled that the state’s money transmission regulations include cryptocurrencies. Businesses must have a license and meet transmitter regulatory requirements if they plan to transmit digital currency.


In Idaho, virtual currency is not mentioned in money transmission regulations. However, the Department of Finance in the state offers some guidance to cryptocurrency businesses, stating that licensing is required if the company acts as an exchanger or accepts legal tender for virtual currencies.


The Department of Financial and Professional Regulation in Illinois release guidelines for digital currency businesses in 2017. Virtual currencies are not considered money for the purchase of the Transmitters of Money Act, but if a business is involved in fiat currency transmission, regulations and licensing as a money transmitter apply.


The Department of Financial Institutions in Indiana does not offer guidance for virtual currency businesses operating in the state. If a company conducts business involving fiat currency, however, a money transmitter license is required.


No guidelines are published for digital currency businesses through the Division of Banking in Iowa. Similar to other states, however, when fiat currency is involved in transmission, a money transmitter license is necessary.


In Kansas, the Money Transfer Act does not apply to virtual currency exchanges, and a business engaged in the transmission of that currency does not have to hold a license. However, if a third party is involved or fiat currency exchanges hands, a license for money transmission is required.


The money transmitter law in Kentucky does not provide guidance for virtual currency businesses, although they are defined. When fiat currency is involved in transmission, a license is required.


The Office of Financial Institutions in Louisiana does not specifically address digital currencies. However, businesses may be subject to licensing requirements when exchanging virtual currency as a money transmitter.


Money transmitter regulations in Maine do no specifically mention virtual currencies. However, the Office of Consumer Credit Protection may require a license for those who exchange digital currency for fiat money.


In 2018, Maryland’s Financial Consumer Protection Commission published guidance on virtual currency exchanges and regulations. There is no current license requirement for companies dealing with digital currencies, but any businesses that meet the definition of a money transmitter must be licensed.


The Division of Banks in Massachusetts does not mention virtual currency, but the state provides specific guidance to businesses on a case by case basis regarding money transmitter licensing.


The Department of Insurance and Financial Services offers no guidance to virtual currency businesses operating in Michigan. However, the exchange of fiat currency requires a money transmitter license.


There are no current guidelines for digital currency companies in Minnesota. However, the Commerce Department in the state may require a license if fiat currency is involved in business activities.


The Mississippi Money Transmitter Act does not define virtual currency; however, businesses that fall under the category of a money transmitter and engage in fiat currency exchange require a license.


In Missouri, the Division of Finance has not published specific guidelines for virtual currency businesses. Like other states, however, a money transmitter license is likely required if fiat currency is involved.


Montana does not regulate money transmission, either for fiat or cryptocurrency businesses.


In Nebraska, several bills have been introduced to help regulate virtual currency businesses in the state. While none have passed, the money transmitters law requires licensure for businesses that fall under the definition of money transmitter.


The Department of Business and Industry in Nevada does not define or mention virtual currency. However, a company that is involved in fiat currency exchange alongside its digital currency activities requires a license.

New Hampshire

New Hampshire businesses who transmit money in fiat and cryptocurrency must have a money transmitter license.

New Jersey

The Money Transmitter Act in New Jersey does not mention virtual currency. The State’s Department of Banking and Insurance provides no guidelines on if digital currency businesses need to have a money transmitter license.

New Mexico

Businesses that are engaged in providing the exchange of virtual currency for money or any other form of monetary value in New Mexico must be licensed as a money transmitter.

New York

A BitLicense is available for companies engaged in virtual currency transmission in the state of New York. Some companies may also have to obtain a money transmitter license, depending on their business model.

North Carolina

Virtual currency companies were added to the Money Transmitter Act in North Carolina in 2016. Businesses that deal in fiat currency as well as cryptocurrency must be licensed to operate legally in the state.

North Dakota

Money transmission laws in North Dakota do not mention virtual currency businesses. However, companies that also handle fiat currency must have a money transmitter license.


Ohio’s Department of Commerce does not specifically mention virtual currencies in its money transmitter laws. However, like other states, a license may be required if the business also involves fiat currency transactions.


In Oklahoma, there is no published guidance on cryptocurrency businesses. A company may require a money transmitter license if they also handle fiat currency.


There is no mention of virtual currencies in Oregon money transmission regulations. While no guidance is provided, a license for money transmission is likely required if fiat currency is involved.


In Pennsylvania, virtual currencies are not considered money, and so the transmittal of these currencies is not subject to money transmitter licensing regulation.

Rhode Island

Businesses operating in Rhode Island have little guidance on the need for a money transmitter license if they deal in virtual currencies. An attempt to add digital currency into the regulation failed in 2016. However, a license may be required if fiat currency is involved.

South Carolina

In South Carolina, regulations for money transmitters do not mention virtual currencies. However, the Money Services Division of the state manages licensing and regulation for digital currency businesses, and a money transmitter license may be required to operate legally.

South Dakota

Cryptocurrency businesses in South Dakota do not have guidance on money transmission regulations. However, a license may be required if fiat currency is involved.


In Tennessee, companies working in virtual currency exchange must have a money transmitter license in order to operate in the state.


In 2014, Texas released guidance on money transmitter regulation and virtual currency businesses, although it is not completely clear. According to current laws, a money transmitter license may be required depending on how the business handles fiat currency in its business model.


There is no mention of virtual currency in current Utah money transmitter regulations. However, cryptocurrency companies may require a license if their business engages with fiat currency exchange.


In 2017, legislation was passed in Vermont to define virtual currency, which laid the groundwork for including businesses involved in digital currency practices in money transmitter licensing requirements.


In Virginia, money transmitter laws do not mention virtual currencies. Currently, the state does not regulate the industry, but companies that handle fiat currencies as well are required to have a license.


Virtual currency businesses operating in Washington state are included in money transmitter regulations, meaning a license is required.

West Virginia

In West Virginia, the Department of Financial Institutions does not specifically mention or provide guidance on virtual currency businesses. However, a license may be required if fiat currency is involved.


Lawmakers in Wisconsin state they are unable to license or supervise companies whose businesses are limited to handling virtual currency. However, when fiat currency is added to the mix, a license may be required.


In Wyoming, virtual currency businesses are exempt from the state’s money transmission laws.

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Eric Weisbrot
November 2, 2021

In reply to by admin

Hey Josh,

Are you referring to setting up a machine to mine for Bitcoin? If so, that's not something we can help with.

November 1, 2021

In reply to by admin

I will like to set up a Bitcoin machine in Guam(USA)
Would you help me to apply the money transmitter license ??

July 13, 2020

In reply to by admin

Excellent article, thanks for the advjveu!

Eric Weisbrot
July 13, 2020

In reply to by admin

Thanks, Michael!

Art Webb
February 4, 2021

In reply to by admin

Eric I enjoyed your article. I have a question or maybe a clarification. If I had a company whose business was to assist individuals to buy crypto and either stored the crypto in a company wallet or transferred the crypto to a customer wallet would I be considered a crypto money transmitter or other type financial classification ? The company would not provide investment advice. The company may offer crypto and key custody services. Thank you for any advice ! Art

Eric Weisbrot
February 5, 2021

In reply to by admin

Hey Art,

This specific of a question is is best directed to the state licensing authority to see if a license is required for the actions you intend to take.

Matthew Wallace
March 8, 2021

In reply to by admin

Hi Art,

Was your local state licensing authority able to answer your question? Please share what you discovered, I have the same question myself.


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