Some states in the US are starting to make surety bonds a requirement for businesses dealing in cryptocurrency trading. The purpose of these surety bonds is to protect investors and clients, to some extent, from the loss of funds.
Statements from the Surety Bond Authority suggest the institution appreciates the uses cryptocurrencies have and the reasons for their increased patronage. This is what Greg Rynerson the Authority’s founder and CEO, had to say:
Cryptocurrencies have a lot of benefits that have become answered prayers for the adherents. One is the seamless and secure transaction that it provides. Eliminating identity theft is another. And since there are no third-parties involved, you don’t have to pay for any expensive fees, or wait days for approval, or worry about your cryptocurrency being seized.
Surety Bonds in Four States
Regulations by the states of New York, North Carolina, Connecticut, and Washington stipulate that companies dealing in digital currency transmission have to be backed by surety bonds. In some, regulations were modified to specifically include cryptos.
In New York and Connecticut, the bond amount involved in each case would be based on the company’s transaction volume. In North Carolina and Washington, cryptocurrency bond amounts range from $150,000 to $250,000, and $10,000 to $50,000 respectively.
The new regulations are meant for large entities engaging in the transmission and brokerage of digital assets. This means individuals transacting small amounts of cryptocurrency are not directly affected.
As stated in an article explaining the new rules, there have been different reactions to them by the affected businesses. While some have closed their operations in the mentioned states, others have decided to adapt and comply.