Confidential by defaultEstablished 201072 Jurisdictions
FAQ · CryptocurrencyQ-36682441 min read

A smart contract moves the money, not us. Do we still need a money transmitter license?

Answer
A founder is building a fintech app that lets people send money to family and suppliers in other countries. The company never holds the money. Each payment sits inside a smart contract on a public blockchain until delivery conditions are met. The platform's software operates the contract — it locks the incoming payment and executes the payout. The platform's servers submit the blockchain transactions and cover the network fees so customers never need a crypto wallet.

Yes. If your platform can trigger, block, or relay the movement of customer funds — even through a smart contract you never "hold" — you are performing money transmission under federal law and the laws of nearly every state where your senders or recipients live. Custody is not the legal test. Acceptance and transmission of value are, and control substitutes for custody. (31 C.F.R. § 1010.100(ff)(5)(i)(A))

Faisal KhanAnswered 06/Aug/2026
Share
Page Last Updated: 06/Aug/2026 (3668244)