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The U.S. state of Hawaii has authorized 12 cryptocurrency companies to start operating in the state without needing a money transmission license. No action will be taken against them for conducting unlicensed money transmission activities for two years.
Several cryptocurrency companies independently announced on Wednesday that they have been greenlighted to launch in the U.S. state of Hawaii. They have been admitted to the state’s Digital Currency Innovation Lab (DCIL), a program that “allows digital currency issuers to do business in Hawaii without obtaining a state money transmitter license,” the program’s website reads. This regulatory sandbox is in partnership with the Hawaii Division of Financial Institutions (DFI).
The program, which runs from Aug. 19 to Dec. 31, 2022, accepted applications from cryptocurrency companies between March 17 and May 1. A total of 19 companies applied; 12 companies, including several crypto exchanges, fulfilled the conditions of the program and have been admitted. The website details:
The participating company will be given 2 years to engage in digital currency transactions. DFI has issued a ‘no action message’ – stating that ‘no action’ will be taken against companies conducting what DFI would consider unlicensed money transmission activity, if they have been successfully admitted into the program.
The 12 companies admitted to the program are Apex Crypto, Bitflyer USA, Blockfi, Cex.io, Cloud Nalu, Coinme, Erisx, Flexa, Gemini Exchange, Novi Financial, River Financial, and Robinhood Crypto.
The DFI will monitor all cryptocurrency transactions taking place in the Digital Currency Innovation Lab. Participants will be required to provide updates, including the number and value of transactions. They are also required to provide information regarding the number of complaints received and any regulatory enforcement orders.
Participants that do not receive explicit approval to continue operations must conclude all cryptocurrency transactions when the two-year period is up. “Per the participation agreement, companies must also execute on the wind-down plan and exit strategy. DFI will determine the appropriate licensing for the company to continue operations, if applicable,” the website clarifies.
Hawaii previously had strict rules for crypto businesses, prompting a number of companies to exit the state. Coinbase, for example, ceased operations in Hawaii in early 2018 over requirements to hold fiat reserves.
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