Don't Be Fooled – April 1st Application Deadline for New Louisiana Virtual Currency License

April 1, 2023 marks the deadline to submit an application for the Louisiana Virtual Currency Business Activity License or Virtual Currency Limited Activity Registration in order to receive timely approval from the Louisiana Office of Financial Institutions (OFI). Pursuant to the Louisiana Virtual Currency Business Act (VCBA), a license or other equivalent is required for a company to engage in the virtual currency business after June 30, 2023. Applications submitted by April 1, 2023 will be approved, conditionally approved, or denied before June 30. The OFI began accepting applications for the license and registration at the beginning of the year.

License Requirement

A Louisiana Virtual Currency Business Activity License is required for any person to engage or to hold themselves out as being able to engage in virtual currency business activity with or on behalf of a Louisiana resident. The VCBA defines what does and does not constitute "virtual currency business activity" and provides exemptions for certain entities.

Companies seeking licensure must submit an application and supporting documentation through the Nationwide Multistate Licensing System and Registry (NMLS). Applicants should be prepared to provide a description of their business for the previous five years—including information about its products and services, its projected user base, and specific marketing targets. Applicants are also expected to provide an electronic surety bond of $100,000 and a certificate of coverage for each liability, casualty, business interruption, or cyber-security insurance policy maintained.

Registration Requirement

If the volume of virtual currency business activity engaged by a company with or on behalf of a Louisiana resident will not exceed $35,000 annually, the company can obtain the Louisiana Virtual Currency Limited Activity Registration in lieu of the license. Companies considering this option should keep in mind that they must satisfy the application filing requirements through the NMLS, which largely mirror the items needed for licensure. Registrants are also expected to provide a written statement regarding the anticipated virtual currency business activity for the next fiscal quarter. However, an applicant for the Louisiana Virtual Currency Limited Activity Registration is not required to provide an electronic surety bond. 

Upcoming Deadlines

The April 1, 2023 deadline functions as a guarantee for companies that submit applications by this date to receive a conclusive decision from the OFI by June 30, 2023. After the April 1 deadline, applicants risk processing times that may continue beyond July 1. For assistance with any virtual currency business activity licensing or registration, Hinshaw & Culbertson LLP is available to help.