Definition ∞ The Money Transmission Act is a state-level regulatory statute in the United States that governs businesses involved in transferring funds on behalf of others. These acts typically require such entities, including many cryptocurrency exchanges and wallet providers, to obtain specific licenses, adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations, and maintain certain capital reserves. Compliance is mandatory for entities operating across state lines. It aims to protect consumers and prevent illicit financial activities.
Context ∞ News concerning the Money Transmission Act frequently impacts cryptocurrency businesses operating in the U.S., as many digital asset services fall under its purview. Reports often detail enforcement actions, new licensing requirements, or legislative updates that affect how crypto companies can operate legally. Understanding and complying with these acts is a significant regulatory challenge and cost for many firms in the digital asset space, influencing their market strategies and operational scope.
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