Delaware Money Transmitter License

A practitioner guide (Faisal Khan LLC, July 2026) to the Delaware money transmitter licence, issued by the Office of the State Bank Commissioner (OSBC) under the Sale of Checks Act, 5 Del. C. §§ 2301–2319.

The framing fact

Delaware has not adopted the MTMA. It still runs a statute drafted for sellers of checks and money orders and later stretched to cover money transmission — nineteen sections, several a single sentence, with no permissible investments framework, no tiered net worth, no deemed-approval clock, and no modern control-person architecture. Delaware's numbers therefore look nothing like those in MTMA states, and most published guidance quotes figures belonging elsewhere.

Core parameters

State fees are near-nominal — figures set decades ago and never revised. Real cost is the $100,000 capital plus professional fees (~$5,900–$26,600 one-time excluding capital; ~$7,100–$42,500 annually). One Delaware-specific item others omit: the supervisory assessment (§ 127 — capped at 3.5¢ per $1,000 of assets but with a $500 floor for in-state exams, $1,000 out-of-state),.

No volume scaling anywhere

The bond is driven entirely by location count. $250,000 is the ceiling, not the floor: a single-location licensee moving very large volumes still posts $25,000, because Chapter 23 has no volume escalator. § 2309(b) lets the Commissioner accept an irrevocable letter of credit instead. The bond covers consumers injured by wrongful act, omission, default, fraud or misrepresentation — not business creditors, service providers or agents — and the Commissioner keeps a two-year claims window after cancellation, so surrender does not immediately free collateral.

Net worth is net worth, not tangible net worth — no tangibility qualifier, nothing excluded for goodwill or intangibles — flat at $100,000, GAAP-computed, unscaled by volume or assets. Guides claiming a tangible test have imported another state's rule. The guide is candid that $100,000 is low and reflects a check-seller-era statute; the decisive test is § 2305(2)'s qualitative limb — financial responsibility, experience, character and general fitness warranting belief the business will be run "honestly, carefully and efficiently."

Scope and exemptions

§ 2303 covers selling or issuing checks and receiving money for transmission. "Check" (§ 2302(3)) includes any check, draft, money order or other instrument for the transmission or payment of money — the phrase that carries the statute beyond paper. § 2304 exempts only insured depositories and similar institutions, agents of a licensee (subject to § 2311 filing and bonding), and discretionary Commissioner exemptions. There is no carve-out for broker-dealers or insurers; the US and Delaware are excluded from the definition of "person" instead.

Two-step approval

Delaware does not simply approve. § 2308 issues a written conditional approval; the licence follows only once the bond or letter of credit is filed under § 2309. Investigation runs "to the extent the Commissioner deems advisable" with no clock — any quoted month count is practitioner experience, not entitlement.

Virtual currency — silence, and a rewrite in progress

Chapter 23 does not mention virtual currency at all, and there is no § 2320 despite it being cited elsewhere. No Delaware crypto licence, no BitLicense equivalent. Capture turns on the § 2302(3) language, unanswered publicly for most models; some crypto firms hold licences through case-by-case determinations. The guide debunks a common conflation: Delaware's 2017 blockchain amendments (DGCL §§ 219 and 224, corporate records on distributed ledgers) are corporate bookkeeping law and grant nothing at the OSBC.

Senate Bill 18 would repeal Chapter 23 entirely and replace it with the Delaware Money Transmission and Virtual Currency Modernization Act — defining virtual currency business activity, replacing flat net worth with tiers based on total assets, replacing the location bond with bonds scaled to average daily money transmission liability, mandating risk disclosures, making virtual currency held by a licensee a pro rata property interest beyond its creditors' reach, standardising receipts, adding a 10-day refund window and payroll disclosures, and formalising NMLS coordination. Introduced 16 April 2026, out of committee 19 May 2026, not enacted as at 15 July 2026; it needs a supermajority. A separate bill would let the Commissioner license deposit-taking stablecoin issuers, following the federal GENIUS Act in barring yield to holders. Advice: get a written OSBC determination now, and plan capital against SB 18's tiers.

Ongoing obligations

Renewal filed 30+ days before 31 December with a current office and agent list; miss it and the Commissioner may treat the renewal as a new application, and licensees who ignored supervisory letters may be refused outright — in Delaware, renewal is the enforcement mechanism. Also: continuous bond coverage with 30 days' cancellation notice; assessment invoiced 15 July, due 1 August; agent changes notified within 30 days; funds for foreign transmission forwarded within 5 days with serially numbered receipts stating destination-currency equivalent and payee details (§ 2313(b)); monthly trust reconciliation; and on change of control, a new application with at most 60 days of continued operation. Examination is at any time, no fixed cycle, licensee-funded. Criminal penalties under § 2317 are $100–$500 and/or 90 days per offence — 1972-era figures, deliberately not inflated; the real exposure is losing the licence.

Two myths corrected

$2,000 is the federal MSB SAR threshold (31 CFR 1022.320); $5,000 applies to banks. Delaware sets no state threshold. And a Delaware licence covers Delaware only — there is no national money transmitter licence, no passporting, and no state treats Delaware's as a substitute. It is a cheap, low-friction portfolio addition, sensible for a Delaware-incorporated firm, but rarely where a national build should begin.