I was looking at starting up a site that would sell bitcoins through credit card transactions as a US based business. Not wanting to run into immediate regulatory problems I gave FinCEN (Financial Crimes Enforcement Network) a call. It took them a couple of weeks to get back to me but the answer was yes that business would be required to register as a Money Service Business.
Yes, that is expected. BitInstant is a register MSB, AFAIK. A couple other exchanges based in the US are registered, or in the process of registering.
According to my research (WARNING: not a lawyer, seek your own professional advice) online bitcoin exchanges in the US would need to register in ~47 of 50 states, as well as registering as an MSB with the federal government. (or limit the users accessing the website to a select few states)
There is a multi-state surety bond and registration process, making multi-state compliance a bit easier, but it is definitely a lot of paperwork and background checks required.
Heh, and thats the easy part!
You also need to do the following, just off the top of my head:
- Quarterly audits that you pay for
- Every 6 weeks you need a verified and updated AML Program
- Attend BSA training twice a year
- Bend over backwards and get anally raped every day....
The amount of red tape the government requires to do anything more than piss is just so beyond sanity it would be funny if it weren't ruining lives. But people watch MSNBC and ABC and think our problems are caused by Coca-Cola overpaying it's CEO. Give me break.