Alabama businesses that rely upon or entertain the use of virtual currency will have to contend with a new law that more clear regulates the use thereof. The recently passed Alabama Monetary Transmission Act is a legislative attempt to update the 1961 Sale of Checks Act on account of new technology and the increasing use of currencies like Bitcoin, classified by the IRS as a form of property requisite of reporting amid gains and losses. In addition to clarifying the legitimate handling of virtual currency, the act also provides law enforcement officials additional tools with which to prevent money laundering and other illegal activities.
The increasing extent to which business is conducted online and via unconventional means necessitated that state law keep pace. In order that Alabama remain an attractive destination for business and investment, modernization made sense.
The bill was also sponsored by Representative Ken Johnson and signed into law by Governor Kay Ivey after passing legislative approval in May.
Whether legislation like this changes how business is done remains to be seen, but it should certainly make an impact given options currently availed to tech-savvy companies. The value of Bitcoin is, for example, is determined by buyers and sellers and doesn’t entail the use of official tender. Its popularity has ebbed and flowed during the last several years.
What the New Law Could Mean For You
Businesses that utilize any form of virtual currency may wish to familiarize themselves with the new law or otherwise consult with a legal professional to ensure they’re keeping records appropriately as per possibility said documentation may be subject to audit by the Alabama Securities Commission. The Act lays out clear expectations for how those records ought be kept. Among others potentially impacted, the legislation implicates money transmission, non-banking entities and debt management services. There are, however, exemptions for, “banks, bank holding companies, securities-clearing firms, payment and settlement processors, broker-dealers and government entities,” according to AL.com.
According to a press release from the Alabama Securities Commission, “The Act governs non-banking entities that engage in the business of selling, issuing or otherwise dispensing checks or transfers of money on behalf of individuals who may regularly use these services.”
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