Fintech in the US and nuances of Certification, AI & Cryptoassets

Registering an international fintech startup requires an understanding of the legal nuances of the jurisdiction a fintech company will be operating in. If you’re planning on registering a fintech company in the US, you’ll probably find this piece pretty useful.

Fintech Company: Certification

Certification of a fintech company in the US means the ability to transfer registered activity from one jurisdiction to another. The concept of passport licensing isn’t recognized by the regulatory regime applicable to provision of financial services in the US .

Opening Fintech Companies in the US: Requirements

Normally, being physically present isn’t required for the obtainment of a fintech license in the United States.

US: Providing Fintech Services

Marketologists or promoters specializing in the placement of securities are required to apply for registration with the CFTC or SEC. The US has rules in place regulating marketing materials like these & their content. Certain rules related to the veracity of advertisements are applicable to advertisers as well.

US: Using AI in Business Activities

Using automated investment advisory services is usually regulated by the SEC. Under the SEC, robotic consultants are recognized as investment advisors; hence, they should be  registered with the SEC. There’s certain requirements in the Advisors Act that robotic advisors are required to be compliant with. In particular, they must advise in accordance with fiduciary duties of advisers to their clients. Automated consultants must also submit specific reports to the SEC. Apart from that, they’re also required to meet the criteria for portfolio management, privacy protection & protection of clients’ assets.

Blockchain

Using blockchain technology is regulated by legislation enacted in different US states.

Under the Arizona E-Transactions Act, blockchain-based e-signatures, smart contracts & contracts are recognized as being valid. There’s a law in Vermont which recognizes blockchain records as evidence. Wyoming has its own version of the UCC specifically defining & classifying protected digital assets.

US: Regulation of Cryptocurrencies

Using digital currency or wallets in the US.isn’t regulated by any specific legislation. E-money transactions & devices used for electronic transfer of money are governed by EFTA & deemed e-money transfers.

Digital currencies are also governed by some of the provisions of the BSA & FinCEN filing & reporting requirements.

Quite a few states have their own requirements for  exchanging & trading in digital currencies in the United States. The NY BitLicense is required for transferring & exchanging digital currencies in the United States, while the Illinois Money Transfer Act has a provision excluding digital currencies. 

It follows from the above that many aspects of cryptocurrency regulation in the US are pivotal on a particular state where a cryptocurrency business operates.