Recently, Louisiana lawmakers and regulators have taken steps to legalize operations in states, including cryptocurrencies. On June 15, the Governor of Louisiana will enable financial institutions and trust companies to offer cryptocurrency storage services to their customers as long as they meet certain risk management and compliance requirements, starting August 1, 2022. I signed the bill. On June 20, the Louisiana Financial Institutions Authority (OFI) announced a draft rule on licensing and regulation of cryptocurrency businesses in the state under the Louisiana Cryptocurrency Business Act, which came into effect on August 1, 2020.
Cryptocurrency storage service:
To legally provide cryptocurrency custody services under the new Louisiana law, the entities must be financial institutions or trust companies, making these entities available to third-party providers. The new law defines a “financial institution” as a federal insurance depositor authorized under state or federal law. The law allows these entities to legally perform storage services, including cryptocurrencies, if they meet certain “self-monitoring” requirements, such as: (1) Risk management and effective managed currencies to measure and monitor related risks associated with digital assets such as virtual; (2) Maintain appropriate insurance coverage. (3) Maintain a monitoring program to monitor third-party service providers used to provide escrow services.
Cryptocurrency transaction license:
The new OFI rules establish some important rules related to running a cryptocurrency business in the state. For example, (i) licensing interrelationships with other states, (ii) licensee reviews, (iii) bonding requirements, and (iv) prohibited injustice, deceptive or fraudulent practices. It also establishes OFI enforcement authority to regulate enforcement and provides a way for companies already operating crypto businesses in the state. If the entity is already engaged in the cryptocurrency business in the state, you can legally continue the business in the state by applying for a license or registration with the state within 90 days from the start date of the business. ..
Practice it: Louisiana is the latest state to allow cryptocurrency storage services (similar provisions in other states are explained in this blog post). They resisted operating in space without the certainty of federal law. However, the passage of Louisiana laws and regulations provides a way for crypto companies to pursue certainty under state law. If you do business in Louisiana, you need to make sure that your cryptocurrency business complies with new laws and regulations.