Regulation
Hawaii Businesses Now Exempt From MTL Tax
Hawaii’s regulator announced the official end of the Digital Currency Innovation Lab (DCIL) on June 30. The DCIL concluded that cryptocurrency businesses no longer need a money transmitter license (MTL) to operate in the state.
Hawaii Cryptocurrency Companies No Longer Need MTL
On Sunday, the Hawaii Department of Commerce and Consumer Affairs’ Division of Financial Institutions (DFI) announced that its DCIL research project has been completed. The project’s findings led to a change in the regulation of cryptocurrencies in the state, effective July 1.
The DFI launched the DCIL in 2020 with the Hawai’i Technology Development Corporation (HTDC). Its goal was to “explore the landscape of digital currency activity within the state while assessing the regulatory framework required for digital currency businesses.”
DCIL aims to support crypto adoption in Hawaii. Source: DCCA
The research project found that the activities conducted by cryptocurrency-related businesses “did not fit within the concept of money transmitting,” as set out in Chapter 489D of the Hawaii Revised Statutes. Cryptocurrency businesses were required to obtain a money transmitting license to operate in the state prior to the DCIL.
According to the press release, the DFI attempted to propose a “special digital currency licensing system” throughout the project, but was unable to come up with one that provided sufficient protection for customers.
As a result, cryptocurrency businesses are no longer required to obtain the MTL issued by Hawaii. As of July 1, businesses can continue to operate in the state as an unregulated business. However, these businesses are responsible for compliant to applicable federal licensing or registration requirements.
Cryptocurrency businesses 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.
Hawaiian authorities issue warning
Iris Ikeda, DFI Banking Commissioner, highlighted the valuable contribution of the DCIL. According to Ikeda, the research project helped Hawaii regulators understand the rapidly evolving cryptocurrency industry:
This project has helped shape our understanding of industry needs and protect the interests of consumers and the financial system as a whole. The conclusion of the DCIL marks an important milestone that reflects a commitment to balancing 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 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 crypto scam. According to the report, scammers are impersonating law enforcement officers to extort money from victims.
The caller informs the victim that there is a supposed arrest warrant against them and that they must pay a fine in crypto to avoid detention. The scammers use real information about the victim to make the scam appear credible. Additionally, they manipulate the caller ID number to make it appear as if it is a call from a government agency.
Police have offered some guidelines to prevent such scams, including not giving personal or financial details to unknown callers, not answering unknown phone numbers and not corroborating personal information if the caller asks to “confirm” it.
Kaua Police also stressed that fines are not issued unless the person appears in court. If a fine is issued, it will be issued in open court, recorded in writing, and will not be payable with a gift card number or cryptocurrency. Finally, Kaua Police urged investors to be cautious and do their research 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