Cryptocurrency Bond
The growing field of cryptocurrency faces increasing regulatory scrutiny. If you work or plan to work as a cryptocurrency trader, you may need a new type of surety bond being called a cryptocurrency bond.
What is a Cryptocurrency Bond?
Some states now recognize cryptocurrency traders as money transmitters (people who provide money transfer services). Money transmitters must be licensed and have a surety bond, meaning some cryptocurrency traders must as well. Also referred to as money remitter bonds, check casher bonds, or money services business bonds, cryptocurrency surety bonds make the bond holder accountable for any violations to state laws and ethical standards applicable to money transmitters.
How does a Cryptocurrency Bond work?
If the state agency responsible for regulating money transmitters believes that a cryptocurrency trader has violated state laws, they may file a claim against the bond for compensation equal to the damage caused or fees owed. The surety will investigate the claim and settle it as long as everything proves to be valid. Whenever the surety settles a claim, the bond holder must pay the debt back including interest and fees.
What is the purpose of a Cryptocurrency Money Transmitter Bond?
This type of bond serves two purposes. Since it holds the bond holder accountable for illegal behavior, it discourages that behavior. And since the surety guarantees payment for all valid claims, bonds also provide a guaranteed mechanism for the state to seek justice.
Who needs a Cryptocurrency Surety Bond?
At the time of writing, only a few states require a cryptocurrency bond, and they only require them of businesses that trade crypto, not individuals. However, the rapid growth of the crypto industry and the expansion of regulations behind it means that more traders will likely need this type of bond in coming years. Let Viking Bond Service help you determine if you need a crypto bond.
Who are the parties involved in a Cryptocurrency Bond?
All surety bonds involve three parties:
- Principal - The crypto trader who obtains the bond and accepts liability for claims.
- Obligee - The state agency that regulates money transmitters and files claims against the bond for the principal's illegal activity.
- Surety - The agency that bonds the principal and settles claims with the obligee. The principal must pay the surety back for all settled claims.
How to get a Money Transmitter Bond for Cryptocurrency
After finding a surety agency you trust to work with, you will need to complete a bond application, supply the bond requirements, and submit to a credit check. The surety agency may request additional documentation. Then, based on your application documents, the surety will quote you the cost of the bond. Expect to pay a small percentage of the bond's total value, more or less depending on your credit. Activate the bond by paying the premium, then prepare to keep the bond renewed on an annual basis.
Why you should get your Cryptocurrency Bond from Viking Bond Service
Not every surety agency issues crypto bonds, but Viking Bond Service is an exception. We are a nationwide leader in surety bonds committed to helping everyone meet their bond requirements. Take advantage of our resources to make bonding easy, affordable, and stress-free.
Request a Cryptocurrency Bond quote
You can get the bonding process started at any time. Request a quote whenever it's convenient. Or ask questions first - contact us or call 1-888-278-7389.
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