The Kentucky Money Transmitter License guide (Faisal Khan LLC, July 2026) covers a high-capital, single-statute state that has legislated an express blockchain exemption — one of the clearest crypto carve-outs in the country.
The sharpest detail is the net worth rule: Kentucky requires $500,000 in GAAP net worth at all times, not the tangible net worth test used in Money Transmission Modernization Act states, with no sliding scale and no reduction for smaller applicants. On crypto, House Bill 701 (effective 27 June 2025) added an express statutory exemption for anyone who develops or deploys blockchain software, exchanges digital assets for other digital assets, or operates a node — read together with 2022 DFI guidance's three-factor test that still governs fiat on/off-ramps and custodial wallets.
What the guide covers:
- Regulator and statute: Kentucky Department of Financial Institutions, under KRS 286.11-001 to -067, NMLS exclusively since 2013
- Fees and bond: a $500 application fee plus a licence fee, and a flat $500,000 bond floor the commissioner can raise to $5,000,000
- Renewal date conflict: DFI and NMLS use 31 December, while the statute on its face still reads 20 September — follow DFI and get it in writing
- Crypto exemption (HB 701): blockchain software development, digital-asset-for-digital-asset exchange, and node operation are expressly exempt by statute
- Penalties: unlicensed activity is a Class C felony under KRS 286.11-057(2), with civil penalties of $1,000 to $5,000 per day
- Ownership thresholds: key shareholders disclosed at 20%, control defined at 25% — build your register to the lower figure