Cryptocurrency and Money Transmitter Bonds


By Amanda Miceli of Chiesa Shahinian & Giantomasi PC

The legal treatment of cryptocurrency is rapidly developing, and, as a result, impacted industries should routinely monitor legislative and agency developments in order to remain in compliance. Specifically, sureties executing money transmitter bonds, which guarantee that a money transmitter conducts business in compliance with the law, including, in some cases, those that transmit cryptocurrency, should be well versed in relevant state and federal regulations.

The Link between Money Transmitter Bonds and Crypto

Money transmitter bonds are government-required surety bonds that must be obtained by businesses or individuals to receive a money transmitter license. As such, the obligee of a money transmitter bond is typically the state agency that is responsible for licensing money transmitters. Cryptocurrencies intertwine with these bonds because they are a form of currency and are, therefore, categorized as “money” by some states. Specifically, cryptocurrency is digital or virtual currency in an electronic medium of exchange that utilizes cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. 

Cryptocurrency Regulations Remain a Hot Topic

While money transmission at the federal level is almost exclusively concerned with money laundering, state laws on these issues have greater complexity. From the perspective of individual states, money transmitter bonds protect the public from financial harm resulting from violations of licensing law committed by the money transmitter. Although statutes differ, in the general course, a party who suffers a financial loss due to illegal activities on the part of a money transmitter (or in some cases a cryptocurrency trader) can file a claim against the bond. 

Money transmitters are regulated on the federal level by The Financial Crimes Enforcement Network (FinCen), which ensures money transmitters do not engage in illegal practices such as money laundering. The states, on the other hand, each have their own regulatory regime when it comes to the transmission of money. Some states have taken the initiative to regulate the transmission of cryptocurrencies, impacting those corresponding statutory bonds. In New York, for example, New York’s Department of Financial Services has implemented a “BitLicense” for virtual currency businesses promulgated at 23 NYCRR §§ 200.1 to 200.22 where nearly any commercial transfer of virtual currency requires a license (23 NYCRR 200.2(q)). However, the treatment of cryptocurrencies on a state-by-state basis is inconsistent. Some states remain silent regarding cryptocurrencies, and others have issued minimal guidance on the treatment of cryptocurrencies, without the adoption of clear laws. For a complete overview of state regulations on cryptocurrencies and licensing, please visit

Although uniform treatment of cryptocurrencies has been proposed, it remains in its infancy. As a result, cryptocurrency continues to be at the forefront of political posturing and legislation.1 In November 2021, cryptocurrencies were mentioned for the first time in U.S. legislation, when a small set of crypto provisions were added to the Infrastructure Investment and Jobs Act. These provisions referred to cryptocurrencies as “digital assets” and defined them as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.”2 According to the new law, any company or person who “transfers digital assets on behalf of another person” will now be considered a “broker” and must issue a Form 1099-B to each customer and to the IRS. This means that centralized exchanges, like Coinbase, Binance, etc., now have to track every purchase or sale of cryptocurrencies made on their platforms, indicate what each user paid for each coin, and how much profit or loss they made when they sold.


Sureties underwriting money transmitter bonds for cryptocurrency transmitters should, prior to issuance of such bonding, be well versed not only in federal regulations, but also in the state laws that control the bond. Specifically, understanding how the state explicitly treats cryptocurrency within the confines of its licensing requirements will impact whether the surety should employ more rigorous underwriting standards than may be appropriate for other bonds.

Find Out More

View Miceli’s NASBP Virtual Seminar on this topic here: Access all NASBP Virtual Seminars here: Access free NASBP Podcasts here:   

Amanda L. Miceli is an attorney in the surety and fidelity group at the law firm of Chiesa Shahinian & Giantomasi PC in West Orange, New Jersey. Miceli received her B.A. in philosophy from Franklin and Marshall College before graduating from Seton Hall Law School. Prior to joining Chiesa Shahinian & Giantomasi PC, Miceli was a law clerk in the United States District Court for the District of New Jersey. She is a frequent presenter at surety law conferences. She can be reached at [email protected] or 973.530.2043.

End Notes

1 Most recently, on March 9, 2022, President Biden issued an Executive Order on “Ensuring Responsible Development of Digital Assets,” which specifies, among others, the following objectives: (1) protecting U.S. consumers, investors, and businesses; (2) preserving the stability of the U.S. and global financial systems; and (3) promoting responsible technological development. While the Executive Order attempts to balance the risks and potential benefits of digital assets, it focuses on and prioritizes addressing the risks.  Please visit the following resource for more information:

2 National Law Review (2022). Cracking the Crypto Code: New Reporting Obligations (Current Developments in the World of Blockchain and Cryptocurrency).