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Bitcoin [BTC] and other cryptocurrency exchanges are not money transmitters under MTA, says State of Pennsylvania

Priya

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Bitcoin [BTC] and other cryptocurrencies exchanges not money transmitters under MTA, says State of Pennsylvania
Source: Pixabay

The State of Pennsylvania has released a statement on Bitcoin and other cryptocurrencies on their official portal. This guidance is in relation to the Money Transmitter Act [MTA] aka Money Transmission Business Licensing Law applicable to virtual currency exchanges.

The official statement also reveals that the Department of Banking and Securities [DoBS] of Pennsylvania has received multiple inquiries from businesses engaged in providing services related to buying, selling and trading cryptocurrencies. This was followed by the DoBS stating that the guidance is being published as they will not be addressing all the requests on a case-by-case basis.

According to MTA, money is defined as currency or legal tender that is recognized as a medium of exchange. To add on, the law of Pennsylvania stated that currency issued by the US government is only recognized as money in Pennsylvania. Due to this, Bitcoin and other cryptocurrencies are not classified as money according to the act. The statement also points that in the US, there has been not a single jurisdiction that has declared digital currency as a legal tender.



“…Thus, in order to “transmit” money under the MTA, fiat currency must be transferred with or on behalf of an individual to a 3rd party, and the money transmitter must charge a fee for the transmission”

They stated that a majority of the requests related to guidance on the applicability of the MTA were from cryptocurrency exchanges that were web-based. This was further followed by the DoBS deeming that these platforms are “not money transmitters” under the Money Transmitter Act.

“The Platforms, while never directly handling fiat currency, transact virtual currency settlements for the users and facilitate the change in ownership of virtual currencies for the users. There is no transferring money from a user to another user or 3rd party, and the Platform is not engaged in the business of providing payment services or money transfer services.”

The DoBS also gave an official statement on Kiosks and ATMs. They said:

“In both the one-way and two-way Kiosk systems, there is no transfer of money to any third party. The user of the Kiosk merely exchanges fiat currency for virtual currency and vice versa, and there is no money transmission. Thus, the entities operating the Kiosks would not be money transmitters under the MTA.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin [BTC] will take another 22 years to regain its all-time high, says research analyst

Akash Anand

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'Bitcoin [BTC] will take another 22 years to regain its all-time high', says research analyst
Source: Pixabay

Bitcoin [BTC]’s rise and fall has been a consistent event that has grabbed headlines in the cryptocurrency space. According to the latest financial analysis conducted by UBS research analyst Kevin Dennean, the fans of the cryptocurrency will have to wait for over 22 years to climb back to its earlier heights of $19,000- $20,000.

Dennean made these claims comparing the pattern of Bitcoin and the cryptosphere with the trends of other financial system crashes like the Dow Jones crash of 1929, the NASDAQ slide in 2000 and the Oil tumble of 2008. The UBS analyst pointed to how a lot of the cryptocurrency’s proponents stated that Bitcoin is en route to a bull surge because ‘other assets did that in the past’. He laid the foundation for the delayed rise of Bitcoin by saying:

“We’re struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are.”

Dennean was also of the opinion that not every bubble that bursts recovers its old highs, taking the example of the Nikkei crash, which after 30 years of its fall, has still not managed to reach its earlier peak, currently trading at around half its all-time highs. The Japanese asset price bubble was an inflated economic bubble in the late 80s where the real estate and the stock market prices were greatly volatile. In 1992, the price bubble burst and Japan’s economic machine came to a standstill.



Another figure used by Dennean was the fact that all the asset classes, including Bitcoin, fell by 75 percent with Bitcoin breaching the 80 percent barrier. After the crash, only the Dow Jones and the NASDAQ provided a reprieve to users after rising back to its earlier highs.

At the time of writing, Bitcoin was trading for $5292 with a market cap of $93.423 million. The 24-hour trading volume was clocked at $12.985.





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