Regulation
Businesses in Hawaii are now exempt from MTL
Hawaii’s regulator announced the official closure of the Digital Currency Innovation Lab (DCIL) on June 30. DCIL concluded that cryptocurrency firms no longer need a Money Transmitter License (MTL) to operate in the state.
Hawaii Cryptocurrency Firms No Longer Need MTL
On Sunday, the Hawaii Department of Commerce and the Division of Consumer Affairs of Financial Institutions (DFI) announced that their DCIL research project had concluded. The project’s findings led to a edit in the regulation of cryptocurrencies in the state, starting from July 1.
The DFI launched the DCIL in 2020 with the Hawai’i Technology Development Corporation (HTDC). Its goal was to “explore the landscape of digital currency activity within the state while assessing the regulatory framework required for digital currency businesses.”
DCIL aims to support crypto adoption in Hawaii. Source: DCCA
The research project found that the activities conducted by cryptocurrency companies were “not consistent with the concept of money transmitter,” as stated in Chapter 489D of the Hawai’i Revised Statuses. Cryptocurrency companies were required to obtain a money transmitter license to operate in the state prior to DCIL.
According to the press release, the DFI attempted to propose a “special licensing scheme for digital currency” throughout the project, but failed to deliver one that offered sufficient protection for customers.
As a result, cryptocurrency businesses are no longer required to obtain the Hawaii-issued MTL. As of July 1, businesses can continue to operate within the state as an unregulated business. However, these businesses are responsible for compliant to applicable federal licensing or registration requirements.
Cryptocurrency companies must comply with “all relevant federal regulatory requirements relating to consumer protection, anti-money laundering, etc.,” including those issued by the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority.
Hawaii authorities issue warning
Iris Ikeda, Banking Commissioner at DFI, highlighted the invaluable insights provided by DCIL. According to Ikeda, the research project has helped Hawaii regulators understand the rapidly evolving cryptocurrency industry:
This project has been instrumental in shaping our understanding of industry needs and safeguarding the interests of consumers and the broader financial system. The conclusion of the DCIL marks a milestone that reflects a commitment to balancing innovation and regulatory responsibility.
Furthermore, the Bank Commissioner solicited investors to remain vigilant about scams and assured that the DFI will continue to work to “ensure that consumers are aware of the risks associated” with the sector.
In June, the Kauai Police Department (KPD) warned county residents of an ongoing crypto scam. According to the report, scammers impersonate law enforcement officials to extort money from victims.
The caller informs the victim that there is an alleged arrest warrant against them and that they must pay a fine in cryptocurrency to avoid detention. Scammers use real information about the victim to make the fraud They appear credible. They also manipulate the caller ID number to make it appear as if the call is from a government agency.
Police have provided some guidelines to prevent such scams, including not providing personal or financial information to unknown callers, not answering strange phone numbers, and not confirming personal information if the caller asks to “confirm” it.
The KPD also emphasized that fines are not imposed unless an individual has been in court. If one is imposed, it will be in court, reduced in writing, and will not be payable with a gift card number or cryptocurrency. Ultimately, Kauai police urged investors to be careful and do their research before paying.
Bitcoin (BTC) is trading at $62,804 in the five-day chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com