Helping a Global Crypto Unicorn with Blockchain Compliance
Objective
To support a non-U.S. blockchain innovator through complex operational planning to apply and obtain state and federal money transmitter licenses.
Background
A leading global digital gaming company with attractive offerings such as downloads, sports memorabilia, and NFTs pursued a business expansion strategy in the U.S. They understood the difficulty of this process and approached InnReg for help in managing the compliance requirements involved with obtaining state licenses and federal registrations for money transmission activities.
The company’s key differentiator is to make it as easy as possible for customers to make payments for digital products through their platform while maintaining privacy.
Engaging in this business model requires operating as a money transmitter, acquiring separate licenses in 50 jurisdictions, and meeting appropriate compliance, operational and staffing requirements according to each jurisdiction’s specifications.
See also:
Challenges
As a non-U.S. based company, the client requires guidance in successfully navigating the rules and requirements of both state and federal regulators. FinCEN registration and state licensing requirements differ widely in the number of rules to follow, their type, and complexity.
Licensure-related costs and processing times can differ significantly from state to state, and acquisition of each license may take from several months to two years.
The client requires support to understand and address the many obstacles of this complex process. They needed a multi-pronged, multi-jurisdictional approach requiring diligent program management, governance support, and in-depth experience with the nuances of money transmitter regulations as they apply to blockchain platforms—a need which InnReg was well-positioned to address.
InnReg's Solution
InnReg has provided project management and compliance expertise to fulfill the client’s regulatory and licensing requirements necessary to engage in money transmission payment activities across all relevant U.S. jurisdictions.
This role encompasses business planning, compliance advisory and project management services to support the execution of the tasks associated with the acquisition of money transmitter licenses, while serving as a centralized point of contact with the Client’s leadership team to maintain alignment with Client’s strategic goals. InnReg has also helped the client ramp up their compliance function with best-in-class advisory, processes, and procedures.
The scope of our services over the course of the engagement has included the following key components:
Compliance and operational expertise, including policy development and regulatory advice
Project management and governance
Resource assignment and management
Centralized communication
Executive reporting
Client Results
The client is making significant progress in an unfamiliar area of regulation and compliance, and in this process, InnReg is providing key know-how to build the internal resources needed for successful licensing application at both federal and state levels.
In addition, InnReg is contributing expertise and know-how around key compliance requirements such as information security, reporting, and vendor management.
