At the heart of the matter is being licensed by the state of Vermont to operate a Bitcoin ATM. Blu-Bin/PYC has been running this Bitcoin ATM at a Church Street Mall in Burlington for four months but has not received any specific licensing or regulatory agreement from the state. This has led to them receiving a threatening letter from the Department of Financial Regulation in Vermont.
“Among other penalties,” the letter said, “operation of a Bitcoin ATM in Vermont without a license could result in a monetary penalty of $1,000 per day. Given your October 25 start date, you are already facing an administrative penalty over $75,000. Additionally, knowingly engaging in a money services business without a license carries potential criminal penalties of a $10,000.00 fine plus up to three years in prison.”
The company that is providing the service, Blu-Bin, is a subsidiary of PYC, which is providing Bitcoin ATM service in seven states throughout the U.S.. PYC spoke to VPR in Vermont about the ongoing issue, and expressed that this is the first and only issue that they’ve had regarding needing a state-specific license.
“According to FinCEN, I do need to have an MSB [Money Services Business] license, which I do for all 50 states and territories,” Pagan-Your said. “And that’s just telling FinCEN that I do provide a service with digital currency according to the new statutes, and Vermont doesn’t have that. I’m not sure what Vermont’s trying to get at because it’s a stretch. And it’s funny that they singled me out instead of (similar) companies that have been operating in the state since 2012.”
This letter is not the first time the state regulators and Blu-Bin/PYC have been in contact. They have had conference calls where the state representatives have made inquiries about the business and services offered. The nature of the talks were non-threatening and cordial, but the state’s regulators were having trouble understanding Bitcoin itself, and how the services fit into existing state sanctions, according to PYC.
“Obviously we want to comply with any regulatory framework that needs to be complied with,” Blu-Bin CEO Dan Riley said. “We’re not trying to run anything under the table, so to speak. But what we’re trying to make sure is that this is properly taken care of. Because our understanding has been that the state doesn’t understand where this falls, so they’re just trying to shove us into a box that we might not fit into.”
The Bitcoin Skyhook ATM is still in their possession but is currently not in operation. This flap looks to be a long way from getting resolved, as PYC CEO Emilio Pagan-Yourno seems resolute in his position. According to him, the company will not be submitting any state licensing application and will not remove the machine.
“I’m not entertaining that at all,” Pagan-Yourno said. “In actuality, I don’t need a license, so them reaching out for something I don’t need; it doesn’t matter. They can’t fine me on something I don’t need.”
It looks like the State of Vermont is not ready for Bitcoin ATMs. Blu-Bin/PYC will be wise to secure legal counsel if that is their stance. We’ll update this Bitcoin ATM story as it progresses.
How do you feel Vermont is handily this issue? Will this send future Bitcoin business next door to Bitcoin-friendly New Hampshire? Share above and comment below.
This post was last modified on 19/02/2015 11:54