Quote from: tagbond on October 22, 2013, 08:48:29 PM

Been reading your posts for a while now, all very interesting and informative. Quick question for you:

I have a startup operating outside of the USA (in Philippines), with all banking done here as well. The business units include a crypto exchange, digital wallets, and a rewards system. It deals with both crypto and fiat and definitely falls under the MSB licensing rules. We are registered with Fincen as MSB, but not with the individual states. I could just switch off the service to anyone in the USA, which seems a shame - we reached out to Meracord, who charge a minimum of $250,000 just to get started with them, but they said a flat no to us when we said our business involved Bitcoin. Do you know of a list of MTL operators with licenses in all states that would deal with startups like ours?.

One thought that had occurred to me was to approach various MTL entities in each state and offer to pay them a fee to work through their license...but I am pretty sure their surety bonds suppliers may not be too happy with it. We don't have the finance or the time to go through every state to get a license, although in Philippines we are going the process of becoming an EMI, which requires $2.5m in paid up capital, and we will probably do the same in Europe which requires about $500k in paid in capital. No major licensing fees in either case. In the US, I have read it would cost in the region of about $7m to go through all the states, and in the region of $250,000 a year in fees. At this stage, definitely cheaper to go through another licensed entity. Just have to find the best option, and wondered if you know of companies providing this service.

Hi Tagbond. Thanks for reaching out. Unfortunately, most money transmitters are still in a holding pattern for Bitcoin businesses. As you noted, Meracord, one of the larger licensees, is not currently considering Bitcoin agents. The problem is not a legal one. There's no legal reason why an existing licensee couldn't grant a certified agency to a bitcoin business. A Bitcoin business can implement the licensee's AML policies just as well as any non-Bitcoin business. The problem is one of perception. Many existing money transmitters are unwilling to risk alienating their already-existing agency base by getting involved with Bitcoin, which has heretofore been known as a currency for criminals. With the shutdown of Silk Road, the tide is turning in the media from "Bitcoin the drug money" to "Bitcoin the Future". As that picks up steam, we will start to see a better, more accurate, public perception develop.

Edit: I should add that there are some money transmitters willing to work with certain Bitcoin businesses, depending upon the model. I shan't go into detail, but they are out there.