If you are one of the countless people captivated by cryptocurrency, this is an exciting time. The number of different cryptocurrencies is expanding; the amount of money flowing into various coins increased every day; major investment houses are starting to take cryptocurrency seriously; and the groundwork is being laid for a robust cryptocurrency marketplace. This looks like the start of an economic revolution. Cryptocurrency has already cleared some early hurdles and proved many initial detractors wrong. Much remains unknown. However, there appears to be tremendous upside for people willing to take an early bet on this booming industry.
As cryptocurrency moves further into the mainstream, it’s attracting more attention from regulators. They are not, in most cases, moving to shut crypto markets down. But they are taking a serious look at the effect those markets have on various economic instruments and on the public good more generally.
One concrete step regulators in some states have taken is to require cryptocurrency traders to have a type of surety bond known as a money transmitter bond but colloquially called a cryptocurrency bond. This bond requirement is new, meaning this type of bond is too. Cryptocurrency traders understandably have a lot of questions about how the bond works and what it means for their business. Viking Bond Service leads the emerging cryptocurrency bonds industry, and we’re here to provide straightforward information. Here’s what you need to know about cryptocurrency bonds.
Cryptocurrency Bond Basics
Money transmitter bonds (eg. crypto bonds) hold a money transmitter responsible when they don’t follow state rules relevant to how people offer money transfer services. Bonds are a way to make the bond holder accountable for illegal behavior and provide their victims with a path to justice. When a cryptocurrency trader breaks the law, the state agency that regulates money transmitters may file a claim against the bond for compensation equal to the damages caused. The surety agency that backs the bond guarantees payment for all valid claims, ensuring that anyone wronged by a crypto trader can seek and receive a settlement. After the surety settles a claim, the bond holder must pay that debt back. Cryptocurrency bonds hold traders accountable by making them financially liable for paying all valid claims.
Who Needs a Cryptocurrency Bond?
At the time of writing, fewer than 10 states required cryptocurrency traders to get a money transmitter license or the surety bond required for that license. But this industry is changing as fast as it’s growing. Like surety bonds requirements that exist in other industries, the states that adopt early set a standard for the rest to follow until all 50 make surety bonds mandatory. This is likely to happen with cryptocurrency bonds too, especially if the industry continues on its current trajectory. All traders should check if they need a bond now and prepare to need one soon. Contact Viking Bond Service for free advice about whether your state requires a bond.
Planning for the Cost of Crypto Bonds
If you’re not used to paying for a surety bond, the announcement of cryptocurrency surety bond requirements comes as unwelcome news. Likewise, if you’re new to trading you want to put every penny into the hottest coins, not into surety bond premiums. Good news: Cryptocurrency bonds aren’t that expensive. Every state that requires this type of surety bond dictates the amount of the bond, meaning the maximum amount the surety will pay to settle claims. The bond cost, called the premium, is a small percentage of the total bond amount. Your credit determines the exact amount. Bad credit leads to higher bond premiums, and depending on your credit score, financial history, and the surety agency you work with, it could lead to being denied for a bond. If you’re worried about credit affecting your ability to get an affordable bond, work with Viking Bond Service.
Next Steps – Get a Crypto Bond
If you’re in one of the states that requires crypto traders to have a bond, don’t wait to get one. You will first need to find a surety agency that issues cryptocurrency bonds. There aren’t many since this is an emerging new type of surety bond. Then, you will need to complete a bond application, submit to a credit check, and provide the surety with whatever else it asks for. You will next get a quote for the cost of the bond premium. Pay the premium to activate the bond, and the surety will provide a document proving you’ve met the bond requirement.
Viking Bond Service – A Friend to Cryptocurrency Traders
Viking Bond Service is one of the few surety agencies that issues this type of bond in every state that requires them. We make it easy for crypto traders across the country to meet whatever surety bond requirements they face. Request a quote at your convenience. Contact us for more information. Or call us at 1-888-278-7389 to speak with a bond expert directly.