The U.S. state of Hawaii’s regulatory sandbox concludes today. Crypto companies will no longer require a Hawaii-issued money transmitter license to conduct business within the state. However, they must comply with federal regulations.
Hawaii’s Regulatory Sandbox Concludes
The Department of Commerce and Consumer Affairs of Hawaii and the Hawaii Technology Development Corporation (HTDC) issued an announcement on Friday reminding the public that its regulatory sandbox, the Digital Currency Innovation Lab (DCIL), concludes on June 30.
The DCIL is a two-year pilot program by the State of Hawaii, established through a partnership between HTDC and the Hawaii Division of Financial Institutions (DFI). It allows participating digital currency issuers to operate in Hawaii without a state money transmitter license. “This collaborative research project, initiated in 2020, was designed to explore digital currency activities in the state and assess the regulatory framework necessary for companies specializing in digital currency (also known as cryptocurrency),” the announcement describes, adding:
The findings from the project indicate that digital currency companies will no longer require a Hawaii-issued money transmitter license to conduct business within the state.
“The companies will be able to continue transaction activity as an unregulated business,” the announcement adds. However, Hawaiian regulators emphasized that these companies must comply with all applicable federal licensing or registration requirements, including those set by the Financial Crimes Enforcement Network (FinCEN), Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA), as well as relevant federal consumer protection and anti-money laundering regulations.
A total of 11 companies were approved for the sandbox, with a wind-down period from July 1 to Dec. 30, 2024. These companies are Apex Crypto, Bitflyer USA, Cloud Nalu, Coinme, Erisx, Flexa, Gemini, River Financial, Sofi, and Uphold. Blockfi, which filed for Chapter 11 bankruptcy protection on Nov. 28, 2022, was also approved at the start of the sandbox.
Prior to the establishment of the Digital Currency Innovation Lab, crypto firms in Hawaii needed a money transmitter license to operate. Earlier this year, the Hawaii Department of Commerce and Consumer Affairs announced that after the sandbox program’s completion, it was determined that digital currency companies would no longer need a Hawaii-issued money transmitter license to conduct business in the state.
Source: Bitcoin
