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Financial Services Law Insights and Observations

Connecticut amends its Money Transmission Act

State Issues Money Service / Money Transmitters Connecticut State Legislation Consumer Protection Cryptocurrency

State Issues

On June 6, Connecticut enacted HB 5211 (the “Act”), amending laws regulating virtual currency and money transmission. The Act updated "permissible investment" to include additional forms of assets and clarified that “cash” will include demand deposits and cash equivalents, such as international wires in transit to the payee, transmission receivables funded by debit cards or credit cards, and AAA-rated mutual funds. The Act also stated that after October 1, 2024, the owning, operating, solicitation, marketing, advertising, or facilitation of virtual currency kiosks will be considered to “money transmission” business and thus will require persons to be state licensed as a money transmitter.

Additionally, the Act will require money transmission licensees to maintain a detailed accounting plan on winding down operations, as well as meet certain conditions to terminate a licensee’s businesses. Furthermore, the Act will require licensees to communicate third party disclosure information to consumers, as well as provide a physical receipt for transactions to senders. The Act also expanded the banking commissioner’s authority to adopt forms and orders governing digital assets to expressly include nonfungible tokens.