Do you need a license to sell Bitcoin? New Hampshire users say the threshold is too high to bear

Vic Lance is the founder and president of Lance Surety Bond Associates. He is a performance bond specialist who graduated from Villanova University with a degree in Business Administration and later earned an MBA from the University of Michigan Ross School of Medicine.

In the article, Lance discusses a recent legislative update in New Hampshire that defines bitcoin sellers as money transmitters.

If you’ve ever sold or traded Bitcoin in New Hampshire, you may have heard the big news: As of January 1, 2016, Bitcoin sellers in New Hampshire will be considered money transmitters, requiring them to obtain a license and to post a bond to do so when conducting these types of transactions.

The legislation also puts New Hampshire on the same path as the U.S. federal government in moving to regulate bitcoin sellers in the same way as money transmitters.

This is a surprising amount of regulation for a state whose motto is freedom (New Hampshire’s famous liberal motto is “Give me liberty or give me death”).

Users, Traders and Admins

Under the new law, anyone who exchanges digital currency for other currencies (digital or government-issued) will be considered a “transactor” and must be licensed and bonded as a money transmitter.

And the managers, they also need to be licensed and bonded as money transmitters.

Those not affected by the law are strictly designated as “virtual currency users,” or individuals who possess virtual currency and use it to purchase goods or services.

New licenses, bond requirements

These newly registered money transmitters must hold a state-issued money transmitter license and post a $100,000 bond. As is the case with all money transmitters, the bond requirement is designed to protect the public from money transmitters that illegally withhold, seize, or otherwise misuse funds under their control.

$100,000 may sound like a lot, but the cost of a bond is actually much less than the bond amount. In the case of a New Hampshire money transfer bond, $100,000 represents the maximum amount of a bond claim. The cost of a bond can be as little as 1% of the bond amount, depending on the applicant's credit and financial situation.

The new rules specifically exempt retailers that use store credit or gift card transactions because those are not considered virtual currencies.

Experts weigh in

In a state as liberal as New Hampshire, the introduction of this new law has unsurprisingly caused great controversy. On the virtual currency forum, many people posted about the "downfall of Bitcoin in New Hampshire." However, regulators insist that users of the technology will not be hindered by the new rules, and in fact it will have a positive impact in terms of protecting against fraud and mishandling of funds.

For many bitcoin enthusiasts, the big question is how individual bitcoin miners will be affected. Under the law, anyone who converts virtual currency into cash is considered a money transmitter, no matter how small the transaction amount.

Most virtual currency users will convert their bitcoins into cash at some point, but now with the new license bond requirement, they may not be able to cash out. Looking ahead, every virtual currency enthusiast in New Hampshire will be watching closely to see how well the new rules are enforced.

Critics of the new legislation insist that setting up such an unreasonably high cost barrier is unfair to startups that want to get involved in virtual currency transactions. However, others believe that the introduction of new rules will protect users of virtual currencies from fraud or other misconduct. Some experts believe that these new regulations have long-term benefits for Bitcoin holders because it also officially recognizes the legality of virtual currencies.

It’s still early days for New Hampshire’s bitcoin regulation, as there are still many unanswered questions about how the new rules will be enforced.

Would you use virtual currency in New Hampshire? How will these new regulations affect you? Share your thoughts with us.

Original article: http://www.coindesk.com/state-regulation-changes-the-game-for-bitcoin-in-new-hampshire/
By Vic Lance
Translator: Overnight porridge
Source (translation): Babbitt Information (http://www.8btc.com/bitcoin-in-new-hampshire)