Crypto-to-crypto transfer does not require license under the Colorado Money Transmitters Act

Recently, the Department of Regulatory Agencies in the State of Colorado issued an “Interim Regulatory Guidance” for cryptocurrencies. The agency aims to outline the guidelines for the trading of cryptocurrencies under the Colorado law with the regulatory guidance.

The document states:

“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.”

Furthermore, the document also defines money transmission under the Colorado Money Transmitters Act and identify the types of cryptocurrency transactions which fall under this act.

The Money Transmitters Act defines that 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 cryptocurrency transactions are not recognized as legal tender and that the transactions taking place between individuals do not require a license as stated by the act.

Moreover, the department further stated that the cryptocurrency to cryptocurrency transactions from one consumer to another does not fall under the definition of money transmission as fiat currency is not involved in the transmission. However, if fiat is included in the transmission then an individual’s business may be required to obtain a license under the ‘Money Transmitters Act’.

Erik Voorhees, CEO of ShapeShift tweeted:

“Colorado issues excellent guidance: non-fiat crypto activities do not require money transmission licensing. Well done, Colorado!!”

A Bitcoin Maximalist on Twitter said:

“Colorado gets an A+ in crypto whilst the other 51 states get an F.”

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