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Just In Illinois Releases Digital Currency Regulatory Guidelines:17/06/017

Discussion in 'Bitcoin Investments | Discussions' started by zedzed, Jun 17, 2017.

  1. zedzed

    zedzed Grand Mod

    Morning every one,

    The Illinois Department of Financial and Professional Regulation has issued a 9-page report expressing its interpretation of how the Illinois’ Transmitters of Money Act (TOMA) applies to digital currencies. Most notably, the Department declined to classify cryptocurrency as money and decided that most digital currency transactions fall outside of the purview of TOMA unless they involve a third-party intermediary.

    Illinois Denies Cryptocurrency is Money

    Significantly, the Department explicitly states that decentralized digital currencies do not fall under the regulatory classification of “money” because they “lack intrinsic value,” have not been adopted as government currency, and are “not convertible by law.” As the report states:

    Accordingly, although digital currencies are a digital representation of value that is used as a medium of exchange, store of value, or unit of account, they are not considered money for the purposes of TOMA as digital currencies have not been “authorized or adopted by a domestic or foreign government as a part of its currency.”

    In fact, the Department states that cryptocurrency could represent an entirely new asset class:

    Decentralized digital currency can also be considered a new asset class that is neither currency nor commodity.

    That does not mean cryptocurrencies are free from regulation in Illinois, however. Digital currency may fall subject to TOMA regulatory and licensure requirements when they become involved in a transaction that also involves what TOMA classifies as money. “However, should transmission of digital currencies involve money in a transaction, that transaction may be considered money transmission depending on how the transaction is organized. Any person or entity engaging in a transaction involving both digital currencies and money should request a determination from the Department on whether or not such activity will require a TOMA license,”

    ⏳ When Cryptocurrency Transactions Fall Subject to Regulation

    According to these guidelines, the Department lists the following activities as money transmission and thus subject to TOMA regulation and licensure:

    Exchanges in which digital currency and money is transmitted through a third-party escrow service
    Exchanges through Bitcoin ATMs and other automated machines that operate as third-party intermediaries between buyers and sellers
    In other words, cryptocurrency transactions fall subject to TOMA regulation when a third-party facilitates the monetary transaction between the buyer and seller.

    ⏳Importantly, businesses

    participating in the business of money transmission must comply with TOMA’s net worth requirements. Per this regulation, a business with a single location must have a net worth of at least $35,000 (Digital currency holdings owned by the business do count toward that requirement.).

    The guidelines also explicitly state that the following economic activities do not qualify as money transmission and are not subject to TOMA regulation and licensure:

    The transfer of digital currency, including the exchange of one digital currency for another
    The direct purchase or sale of digital currency for money between two parties; this includes exchanges through Bitcoin ATMs and automated machines that conduct transactions in which the operator is either the buyer or the seller and there is no third-party intermediary
    The payment of digital currency for goods or services
    Third-party digital currency payment processing
    Digital currency mining
    Multi-signature transactions
    Blockchain 2.0 activities, including transmitting colored coins executing and smart contracts
    Nevertheless, the Department recommends both individuals and businesses seek a licensure determination before partic

    Illinois Releases Digital Currency Regulatory Guidelines - CryptoCoinsNews
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  3. Gstyles

    Gstyles Upcoming

  4. Filher

    Filher Upcoming

    I find that there is no government in the world, which will say that crypto currency is actual money. And, by scholar definition, it really is not. It is mostly defined as crypto assets, referring to assets which are non-material