The Colorado State Banking Board provided regulatory guidance regarding cryptocurrencies, approved money transmitter licenses for two companies and issued a warning about an allegedly fraudulent financial services website at the board’s meeting on Thursday.
Cryptocurrencies are digital currencies supported by blockchain technology that use decentralized authorities for unit regulation and fund transfer.
The Colorado State Banking Board approves money transmitter licenses for businesses that offer money moving services.
These licensees include traditional money transmitter companies such as Western Union, bill pay companies such as Bill.com, payroll card companies such as Paychex and technology companies such as Amazon.
Businesses must pass background checks and have their business plans analyzed by the Colorado Division of Banking before receiving a license.
State Bank and Financial Services Commissioner Patty Salazar said the Colorado Money Transmitters Act does not seek to regulate cryptocurrency exchanges itself.
That is, if businesses enable two people to exchange cryptocurrency or if the business helps one person exchange U.S. dollars for cryptocurrency, the state law does not apply.
Rather, the law only applies to companies that are involved in transactions where one person exchanges U.S. dollars for cryptocurrency and then the company has the ability to turn that cryptocurrency back into U.S. dollars.
Salazar recommended any companies with questions about the regulatory guidance should reach out to the Colorado Division of Banking.
The Colorado State Banking Board also unanimously approved money transmission licenses for Chicago-based Zero Hash LLC and Philadelphia-based InstaMed Communications LLC.
In addition, the board unanimously approved referring an investigation of the Longmont-based financial services website Mason Union Trust to the Colorado Attorney General’s Office.
“The Division of Banking and the Division of Securities, both within the Colorado Department of Regulatory Agencies (DORA) have been notified of a fraudulent financial services website, www.masonuniontrust.com, and the business name Mason Union Trust, allegedly operating in Longmont, Colorado,” according to a notice sent after the meeting by the Colorado Division of Banking. “This entity is not regulated by the Division of Banking or the Division of Securities and deposits are not insured by the Federal Deposit Insurance Corporation (FDIC).”
2017 Assets
| Rank | Prior Rank | Business name |
|---|---|---|
1 | 1 | FirstBank Holding Co. |
2 | 2 | National Bank Holdings Corp. |
3 | 3 | CoBiz Financial Inc. |
