Is Cryptocurrency Money?

Lex Sheehan

“It Depends.” (TM)

In which state are you’re doing business?

Each state has its own money transmitter regulations. Most states are way behind the times in regards to cryptocurrency. States regulations vary wildly.

Q: Why should you care?

A: Because you can be arrested and charged with financial crimes for unlicensed transmission of Bitcoin or other cryptocurrencies.


FinTech: Financial Technology allowing commercial banks to use online delivery systems to market their banking products and services to customers outside the banks’ geographic branch footprints.

FinCEN: The Financial Crimes Enforcement Network of the United States Department of Treasury.

Money Transmitter: Any business performing money transmission. (Exact definition varies by state.)

Money Transfer Service: Any business entity that provides money transfer services or payment instruments. Money Transmitters in the US are part of a larger group of entities called money service businesses (MSBs).

Federal Crime

Transmitting money without a license is outlawed in 48 states and the District of Columbia, and it was made a federal offense under the Patriot Act in 2001. This is mostly a consumer protection policy meant to make sure people’s money isn’t transmitted by fraudulently.

Money transmitters must register with the proper state agency and may need to register with the FinCEN. They are also required to implement specific anti-money laundering policies and file regular reports.

Money transmission is a broad term, but its legal definition is much more narrow. Cryptocurrency investors are not automatically subject to state and federal regulation simply because they send Bitcoin or other virtual currencies from one person to another. Rather, a money transmitter must be licensed if it exchanges virtual currency for real currency, other virtual currency, or other value.

Who Needs to Register as a Money Transmitter?

Any business that conducts more than $1,000 in business in any category of activity listed below:

  • Check Cashing
  • Money Orders
  • Currency Exchanges
  • Money Transfer Services
  • Traveler’s Checks

What’s the Best State For Cryptocurrency Entrepreneurs to do Business?

Very few states have explicitly amended legislation to address cryptocurrency. Most have not dealt with the issue and could put your business in legal jeopardy.

In my next article, I’ll attempt to rank the states for cryptocurrency friendliness.

Are Your Wages Money?

Do you consider the wages/salary your employer pays you to be “money”?

In the United States, employees could be paid in cryptocurrency. However, it would be difficult for the employer to comply with U.S. tax laws.

Several U.S. based-companies are paying their international workers in Bitcoin. About 200 companies are using a service called Bitwage, a Bitcoin payroll company that allows W-9 and 1099 workers to receive payments in Bitcoin, according to Bloomberg Law.

What do You Think?

Economists define money as something that serves as a medium of exchange, a unit of accounting, and a store of value. Money is a medium of exchange when everyone, with whom you wish to do business, agrees to accept it in making transactions. Does everyone accept it now?

When Bitcoin began, it was not accepted. Now, it’s gradually becoming more and more accepted.

Gaining Understanding and Confidence

What is money?

What are digital currencies?

Are cryptocurrencies money?

How do they work?

Find out the answers to these questions an more.

Day 1 of the Cryptocurrencies Developers Class is all about money (what it is, its history and relationship to digital currencies) and would serve as a good educational resource for those in finance and insurance professions.

The rest of the course is about how to leverage our understanding of money and blockchain technologies to build our own cryptocurrency.

Join me in class where we’ll:

  • Distill facts from fiction
  • Provide pertinent resources on a guided journey of learning
  • Provide well structured lab assignments
  • Provide starter projects (and completed solutions)
  • Provide insightful visual presentations
  • Provide a Certificate of Completion to attendees that finish the assignments

… and that’s just the 1st half of the course. In the 2nd half we cover the Ethereum blockchain.

I have condensed this class into an Immersive one week Master Class in Atlanta, GA.

The class location is TBD but will not be far from the airport.

I’m working on getting a package, discounted hotel deal for out-of-town attendees.

Register now, while seat are still available at

Thanks, hope to see you in class! — Lex Sheehan

Lex Sheehan

Atlanta, GA

Software Engineer

Author Learning Functional Programming in Go



Twitter @lex_sheehan

LinkedIn lexsheehan

This article originally appeared at Is Cryptocurrency Money?.

This work is licensed under the Creative Commons Attribution 3.0 Unported License.

Lex Sheehan

Written by

B.S. in Computer Science (minor: Business) from Auburn University

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