Hawaii’s regulator announced the official closure of the Digital Currency Innovation Lab (DCIL) on June 30. The DCIL concluded that cryptocurrency companies no longer needed a Money Transmitter License (MTL) to operate in the state.
Hawaiian Cryptocurrency Companies No Longer Need MTL
On Sunday, the Department of Commerce and the Hawaii Division of Financial Institutions Consumer Affairs (DFI) announced that their DCIL research project had concluded. The project's findings led to a change in the regulation of cryptocurrencies in the state, starting July 1.
The DFI initiated the DCIL in 2020 with the Hawaii Technology Development Corporation (HTDC). Its goal was to “explore the landscape of digital currency activity within the state while also assessing the regulatory framework necessary for businesses specializing in digital currencies.”
DCIL aims to support crypto adoption in Hawaii. Source: DCCA
The research project concluded that the activities carried out by cryptocurrency-related businesses “did not align with the concept of money transmission,” as set out in Chapter 489D of the Hawaii Revised Statutes. Cryptocurrency businesses had to obtain a money transmission license to operate in the state from the DCIL.
According to the press release, the DFI attempted to propose a “special digital currency licensing scheme” throughout the project, but was unable to provide one that offered sufficient protection to customers.
As a result, cryptocurrency companies are no longer required to obtain the MTL issued by Hawaii. As of July 1, companies can continue to operate within the state as an unregulated business. However, these companies are responsible for according to applicable federal licensing or registration requirements.
Cryptocurrency companies must comply with “all relevant federal regulatory requirements involving consumer protection, anti-money laundering measures, 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, DFI's banking commissioner, highlighted the valuable information provided by DCIL. According to Ikeda, the research project 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 completion of the DCIL marks a milestone that reflects the commitment to balance innovation and regulatory responsibility.
In addition, the Banking Commissioner urged Investors should remain vigilant against scams and assured that the DFI will continue to work to “ensure that consumers are aware of the risks associated” with the industry.
In June, the Kaua'i Police Department (KPD) warned County residents are being alerted to an ongoing cryptocurrency scam. According to the report, scammers are posing as law enforcement officers to extort victims.
The caller informs the victim that there is a supposed arrest warrant and that they must pay a fine in cryptocurrency to avoid arrest. The scammers use real information about the victim to trick them. scam They appear credible. They also manipulate the caller ID number to make it look like a call from a government agency.
Police offered some guidelines to prevent these types of scams, including not giving out any personal or financial information to unknown people, not answering unknown phone numbers and not corroborating personal information if the caller asks to “confirm” it.
The KPD also stressed that fines are not imposed unless the person has appeared in court. If one is imposed, it will be done in open court, reduced to a written statement, and not paid with a gift card number or cryptocurrency. Lastly, Kaua police urged investors to be careful and educate themselves 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
