Bitcoin ATM Kiosk

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IN REPLY REFER TO: _________

FILE NO: _________

September 2, 2021

VIA EMAIL ONLY

 

Re: Request for Interpretive Opinion

 

Dear ­­­________:

 

Thank you for your letter to the Department of Financial Protection and Innovation sent by email on August 16, 2021. In your letter, you request confirmation that your client, __________, would not be required to obtain a license under the Money Transmission Act (“MTA”). 1

Background

In your letter, you explain that _____________ operates Bitcoin ATM kiosks in California. To purchase Bitcoin using the kiosk, a customer would provide identifying information, insert the appropriate amount of U.S. Dollars into the kiosk, and specify the customer wallet to which the Bitcoin should be sent. ___________ immediately sends the purchased Bitcoin from its wallet to the specified wallet.

You clarify that the transaction is only between ___________ and the customer, that the transaction is completed immediately, and that no third parties are involved in the transmission. You also clarify that __________ never holds digital wallets on behalf of customers.

For purposes of this opinion, the Department presumes that ___________ is selling Bitcoin from its own inventory and that this is the only type of transaction that the kiosks support.

Analysis

The MTA provides that a person shall not engage in the business of money transmission in California unless the person is licensed or exempt from licensure under the MTA, or is an agent of a person licensed or exempt from licensure.2 Financial Code section 2003, subdivision (q) defines “money transmission” as: (1) selling or issuing payment instruments, (2) selling or issuing stored value, or (3) receiving money for transmission.

_____________ activities are limited to selling Bitcoin. This does not require an MTA license because it does not involve the sale or issuance of a payment instrument, the sale or issuance of stored value, or receiving money for transmission.3

This opinion is based solely on the facts presented in your correspondence. Any changes in the facts or circumstances, as we understand them, could lead to a different conclusion. Furthermore, nothing in this letter should be interpreted to relieve ___________ from any obligations under the laws administered by FinCEN or any other agency of the federal government.

If you have any questions, please feel free to contact me at _________ or _______________.

 

 

Sincerely,

Christopher S. Shultz
Acting Commissioner
Department of Financial Protection and Innovation

 

By

_____________

Senior Counsel

_______

cc: Robert Venchiarutti, Deputy Commissioner, DFPI


[1]  Fin. Code 2000, et seq.

[2]  Fin. Code, § 2030, subd. (a).

[3]  Fin. Code, § 2003, subds. (s), (x), and (u).

Last updated: Sep 10, 2021 @ 12:08 pm