September 20, 2021
FTC Issues Policy Statement Expanding Interpretation of Health Breach… by: Brian J. Boyle and Carolyn V. Metnick Housing Developer Prevails in Key Housing Accountability Act Case by: Caroline Guibert Chase SEC Awards Over $2.5 Million to Whistleblower by: Mary Jane Wilmoth FTC Warns Digital Health Industry to Comply with its Breach… by: Julia K. Kadish House Proposal Targets Charitable Deductions for Conservation… by: G. Michelle Ferreira and Barbara T. Kaplan Illinois Panel Issues Important Ruling on BIPA Statute of Limitations by: Jody Kahn Mason and Joseph J. Lazzarotti Worker Classification Investigations Highlighted by: Bruce P. Ely and Anne Knox Averitt Ninth Circuit Panel Reinstates Restrictions on California Employment… by: Karen E. Wentzel and Michael W. Kelly To Meet (In Person) or Not To Meet (In Person)…That is the Question:… by: Madeline C. Lipe and Amy H. Wooten Ninth Circuit Permits California Ban on Mandatory Arbitration by: Melanie M. Hamilton Weekly Bankruptcy Alert September 20, 2021 (For the week ending… by: Business Practice Group Pierce Atwood ‘Blacklisting’ Rules for Government Contractors Proposed, Again by: Garen E. Dodge A Divided FTC Withdraws 2020 Vertical Guidelines, Introducing… by: E. John Steren and Patricia M. Wagner Rating Agencies Focus on ESG Concerns by: Jacob H. Hupart Illinois Appellate Court Affirms 5-Year Statute of Limitations Period… by: David M. Poell and Kevin M. Cloutier Top 5 FAQs on the FTC’s Warning to Health Apps to Report Breaches of… by: Jennifer J. Hennessy and Aaron T. Maguregui Some Travel Restrictions to Relax for Fully Vaccinated in November,… by: Michael H. Neifach Certified Question: Will West Virginia Take Another Bite at The… by: Ryan W. Steyer and Travis L. Brannon Weekly IRS Roundup September 13 – 17, 2021 by: Tax Practice Group McDermott Will Emery Prepare Your Business to Comply With the OSHA Vaccine Mandate by: Sara J. Higgins OIG Issues Favorable Advisory Opinion on Hospital’s Warranty Program… by: Rachel E. Yount Considerations for Federal Contractors on President Biden’s EO,… by: Johnine P. Barnes and Whitney Bly Edwards, Ph.D. USDA Opens Comment Period for Labeling Requirements for Cell-Cultured… by: Alan J. Sachs and Sarah A. Kettenmann Back to the Drawing Board on WOTUS: Federal Court Vacates Trump… by: Ankur K. Tohan and Endre M. Szalay WINNING!: Another Lead Buyer Off the Hook for TCPA Claim Thanks to… by: Eric J. Troutman Business That Files Lawsuit Becomes Subject to North Carolina’s… by: Philip J. Mohr USCIS Announces New COVID-19 Vaccination Requirement for Immigration… by: Angel Feng Litigation Minute: Drafting International Arbitration Provisions for… by: Jacquelyn S. Celender and Peter R. Morton California Enacts New Legislation to Combat Growing Housing Crisis,… by: Whitney Hodges and Talya Gulezyan Illinois Appellate Court Addresses Statute of Limitations Period for… by: Steven J Pearlman and Edward C. Young Lafourche Parish, LA Local Sales Tax Collector Grants Local Sales Tax… by: Matthew A. Mantle New York State Revises Solar and Wind Property Tax Calculator by: Merrill Kramer Money Money Money: How Much can the Health Plan Surcharge on… by: Natalie M. Nathanson Federal Government Issues New Guidance on Vaccination Requirements… by: Guy Brenner and Megan A. Childs Louisiana Department of Revenue Grants Automatic Sales Tax Return… by: Matthew A. Mantle With 12 Months’ Notice, EPA Bringing Temporary Disinfectant Supply… by: Alan J. Sachs and Kathryn E. Szmuszkovicz Goodbye, Settlements: NLRB to Insist on Total Capitulation Conditions by: Keith J. Brodie and Grant T. Pecor Testing the Limits of Therasense: Patent Owner’s Decision Not to… by: Paul W. Browning, Ph.D. and Amanda K. Murphy, Ph.D. Transatlantic Trade | US and Europe – Week of September 13, 2021 by: Stacy A. Swanson SEC Is Exploring Reforms Regarding Private Fund Disclosure Of… by: Joshua M. Newville and Samuel J. Waldon The Increasing Use of HIPAA Subpoenas in Federal Health Care… by: Vikas Khanna and Scott A. Resnik EPA Announces Sunset of Temporary Disinfectant Supply Chain… by: Heather F. Collins and Barbara A. Christianson As Travel Resumes, the FMCSA Urges Drivers to Stay Safe by: Bryan M. Roberts Delta-8 THC Products Are a Growing Concern for FDA by: Food and Drug Law at Keller and Heckman EPA and PBTs: A New Normal? — A Conversation with Richard E. Engler,… by: Lynn L. Bergeson and Richard E. Engler, Ph.D. How Long Do Retailers Take to Respond to Deletion Requests? by: David A. Zetoony The Ninth Circuit, Mandatory Arbitration Agreements, and “Clown Bop… by: M. Brett Burns and Emily Burkhardt Vicente $11.25 Minimum Wage Effective January 1, 2022 for Federal Contractors… by: Laura A. Mitchell and F. Christopher Chrisbens Compensation Considerations and Wildfires by: Angel R. Sevilla and Julie Y. Zong Amendments to The Qatar Commercial Companies Law by: Amjad Hussain and Jaime Oon New York Labor Law Amendments Expand Scope of “Deductions” Claims by: Allan S Bloom Is Shareholder Approval Required To Mortgage Corporate Property? by: Keith Paul Bishop China’s National Intellectual Property Administration Issues… by: Aaron Wininger Guide to Lead Generation for Law Firms by: Sarah Bottorff
Tuesday, September 21, 2021
Recently Florida and Arkansas made it a requirement for those engaging in virtual currency activities to obtain money transmission licenses in their respective jurisdictions.
In August, the Florida Office of Financial Regulation (OFR) issued an industry alert stating that a person engaged in the business of selling virtual currency in Florida must obtain a license under the state’s money transmission law. The OFR cited a recent Florida state court decision holding that virtual currency fell within the definitions of “monetary value” and “payment instrument” for the purposes of being a “money transmitter” under Florida’s money transmission statute. Consistent with this decision, the OFR stated that persons engaged in the business of selling virtual currency must obtain a license under the state’s money transmission law. The OFR’s industry alert notes “As of January 1, 2022, anyone conducting unlicensed money transmitter activity (including selling virtual currency) without having submitted an application to the OFR for a money services business license may be subject to administrative fines or penalties and possible criminal prosecution.”
Earlier this year, Arkansas amended the state’s money transmission statute to expressly address virtual currency activities by, among other things, including “virtual currency” within the definition of “money transmission” activity and thereby making it subject to licensing under Arkansas’s money transmission statue. The amended statute further extends certain reporting and recordkeeping requirements to virtual currency obligations of the licensee, by for example, requiring licensees to retain records for at least five years for each virtual currency obligation sold or paid.
Putting It Into Practice: With limited regulatory uniformity with respect to how companies are treated in their money transmission businesses among states, the added layer of offering virtual currencies brings with it more uncertainty and responsibility. In addition to the Florida and Arkansas actions noted above, California’s DFPI released two recent opinion letters (see here and here) examining whether the sale and purchase of bitcoin through ATMs/kiosks is subject to licensure under the California Money Transmission Act (MTA). In each instance, because the companies’ activities were limited to selling bitcoin, DFPI determined that an MTA license was not required because the activities “do not involve the sale or issuance of a payment instrument, the sale or issuance of stored value, or receiving money for transmission.” Suffice it to say that companies operating in the virtual currency industry will need to keep abreast of changes in state laws and ensure that their compliance protocols take into account differing statutory constructs.
However, there’s also some optimism that additional uniformity may be on the horizon. On September 9, the Conference of State Bank Supervisors released the Uniform Money Transmission Modernization Act to, in part, replace 50 sets of state-specific money transmitter laws and rules with a single set of nationwide standards. Noticeably, the uniform act includes an article on virtual currency making it clear that virtual currency is included in money transmission when received for transmission.
Because enactment of a uniform law in each state could take time, companies will have to continue to wrestle with uncertainties in the near-term, which includes monitoring the money transmissions laws and regulatory guidance of each state in which they intend to conduct business
Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 264
Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm’s Los Angeles and San Francisco offices.
Areas of Practice Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,…
A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm’s Washington, D.C. office.
A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.
With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving…