North Carolina appears to have reversed course when it comes to regulating bitcoin companies in The Tar Heel State. The North Carolina Office of the Commissioner of Banks (NCCOB), in collaboration with the Chamber of Digital Commerce, created carve outs for certain exchanges and administrators based largely on their custodial arrangement.
The FAQ section of NCCOB’s website now reads in part:
“An exchanger that sells its own stock of virtual currency is generally not considered a virtual currency transmitter under the NC MTA. In contrast, an exchanger that holds customer funds while arranging a satisfactory buy/sell order with a third party, and transmits virtual currency and fiat currency between buyer and seller, will typically be considered a virtual currency transmitter.”
Accordingly, it appears for those operating a bitcoin ATM that the NCCOB does not view the direct sale of bitcoin from an operator-controlled hot wallet to an individual buyer as money transmission. This is similar to guidance set forth by the Texas Department of Banking.
Previously, North Carolina limited its exemptions to non-financial businesses, including miners, blockchain and non-custodial wallet providers. Further, lawmakers had once proposed minimum net worth and surety bond requirements for bitcoin companies. How times have changed!
The change in course by the NCCOB is a welcome development, and a great example of industry collaboration with regulators and other stakeholders.