MONEY TRANSMISSION; VIRTUAL CURRENCY
Sponsored By: Jesse Kiehl (Democratic)
Became Law
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Bill Overview
Analyzed Economic Effects
24 provisions identified: 5 benefits, 5 costs, 14 mixed.
Broader grounds to suspend a license
The department can suspend or revoke a license, place a company in receivership, or revoke a delegate designation for many reasons. Reasons include breaking the law, not cooperating with exams, fraud or gross negligence, a delegate’s AML‑related criminal conviction, unsafe or unsound practices, insolvency, or failing to remove a bad delegate after a final order.
New fines and hearing rights for transmitters
The department can fine violators up to $10,000 for each day a violation continues, plus investigation and attorney costs. Except for emergencies, the department must give notice and a chance to be heard before suspending or revoking a license, placing a company in receivership, issuing a cease-and-desist, revoking a delegate, or assessing a fine. An applicant who is denied a license can request a hearing.
10-day refunds for senders
Beginning July 1, 2026, if you ask in writing, a licensee refunds your money within 10 days unless an exception applies. No refund if the money was sent or committed within 10 days, or a contract said to send it later and that happened. No refund if the company reasonably suspects crime, or your request lacks your name and address or phone and the transaction ID. The rule does not cover transfers under federal Regulation E Subpart B or payments processed under a written payee agreement.
Payroll processors are exempt from licensing
A person that provides payroll processing services is exempt from the money transmission law. This covers receiving funds by contract to deliver wages, pay payroll taxes, and make authorized deductions and benefits. The exemption applies when the service fits the definition in the statute.
License fees tied to volume and costs
Beginning July 1, 2026, the department sets license fees so total collections roughly match its regulation costs. Beginning July 1, 2026, annual renewal fees are based on each licensee’s in‑state transmission volume. The law does not set the fee rates; the department will publish a fee schedule.
Tough penalties for unlicensed money transmission
You cannot provide money transmission for someone who is not licensed or exempt; you can be held jointly liable. The department can issue an order to show cause and require you to stop while it decides. Knowingly running unlicensed transmission is a crime: over $500 in compensation within 30 days is a class C felony; $500 or less in 30 days is a class A misdemeanor.
Customer funds held in trust and safe assets
Licensees must keep permissible investments equal to all outstanding obligations, and those assets are held in trust for customers. The law lists what counts, like cash, insured deposits, U.S. and state obligations, certain money funds, CDs, and qualifying letters of credit. It also allows limited receivables and other short‑term assets under category and aggregate caps. The law defines which banks count as federally insured depositories for these purposes.
More exams and fast quarterly reports
Licensees must file an audited financial statement within 90 days after the fiscal year ends. The department can examine on‑site or off‑site and require records; licensees and delegates usually pay exam costs. Within 45 days after each quarter, licensees must file a financial condition report and a list of all authorized delegates. They must also report key events within one business day, such as bankruptcy, receivership, bond cancellation, or felony charges for key people or delegates.
Stronger capital and trust rules for transmitters
Licensees must keep a minimum tangible net worth: the greater of $35,000 or 3% of the first $100 million, 2% of the next $900 million, and 0.5% above $1 billion. They must maintain a surety bond or approved deposit sized to average daily Alaska liability, capped at $1,000,000, and keep coverage at least five years after they stop operating in the state. Beginning July 1, 2026, average daily liability is the sum of end‑of‑day obligations divided by days in the quarter, and tangible net worth excludes intangible assets. Standby letters of credit must be irrevocable, name the department as beneficiary, allow sight‑draft draws honored within seven days, auto‑extend yearly unless 60 days’ notice, and allow draws after events like bankruptcy or non‑extension. If a trust is set up or the state draws on a letter of credit, Alaska notifies other states and holds funds in trust pro rata for customers. The department sets which top‑tier credit ratings and rating services count for these rules.
Tighter rules for authorized delegates
Before using a delegate, a licensee must adopt written policies, sign a contract that requires legal and anti‑money‑laundering compliance, and run a risk‑based background check. Delegates must hold transmission money in trust for the licensee; mixed funds are still treated as trust money. If a license is suspended, revoked, surrendered, or expires, the licensee must notify listed delegates within five business days, and delegates must stop service right away.
Extra time for current licensees
If you held a valid money services license on December 31, 2025, you may keep operating under it. You may do so until you renew under the new law or through July 1, 2027, whichever is later.
Coordinated multistate licensing and oversight
Beginning July 1, 2026, the department can use a national registry and recognize accredited states to coordinate licensing and supervision. It may accept lead‑state results to streamline reviews. Examination and investigation records from applicants, licensees, and delegates are confidential, with limited statutory exceptions. The law defines unsafe or unsound practices that risk customer funds or solvency, giving the department a clear standard to act.
Transparency and multistate oversight tools
The department may share confidential records with regulators that promise to keep them confidential or when needed to protect the public. It may post a list of licensees and other nonconfidential details online. The department may use analytics tools, accept other agencies’ reports, and join multistate supervision without giving up its own authority.
Five-year records for transmitters
Licensees must keep records for at least five years. This replaces the old three-year rule. Records include outstanding obligations, general ledgers, and other records the department requires.
License and application rules for money transmitters
You must be licensed to transmit money in Alaska unless you are an authorized delegate or are exempt. Applicants must submit business, financial, and background details, pay application and license fees, and post required security. The department may do on-site checks, and you must pay those costs. A license cannot be sold or assigned. The department issues a license only if your finances, experience, and character show it is in the public interest.
Clear receipts and complaint info for senders
Licensees and delegates must post how to file a complaint and include the department’s phone on receipts, websites, or apps. Senders get a paper or electronic receipt in English and any main language used, showing names, date, a unique ID, license info, address, support phone, amount sent, fees, taxes, and any exchange rate. The licensee must forward your money as agreed unless it reasonably suspects fraud or crime; if it holds funds, it must explain why unless law forbids.
Faster licensing and ownership checks
When an application is complete, the department must approve or deny within 120 days, or the license is deemed approved; it may extend for good cause. If a key person is added or replaced, the licensee must notify in 15 days and provide information in 45 days; the department has 90 days to disapprove or the person is approved. A person is presumed to control a licensee at 10% voting power including immediate family, unless they qualify as a passive investor by attesting to limits. Beginning July 1, 2026, people acting together to gain control are treated as acting in concert. Beginning July 1, 2026, applicants and key individuals may submit fingerprints through NMLS.
Proving exemptions and checking in-state status
If you claim an exemption, the department can require documents that prove it. For remote requests, a provider may decide a requester is in Alaska by using the address the requester gives and related records the provider holds.
Court cost and fee rules change
The law changes how courts award some costs and attorney fees in cases under the money transmission law. This change takes effect July 1, 2026 only if each legislative house approved it by a two-thirds vote, as the Constitution requires.
Approval to buy or control a transmitter
If you plan to acquire control of a licensed transmitter, you must get written approval and pay a nonrefundable fee. The department must act within 120 days or the application is approved. Beginning July 1, 2026, owning or controlling 10% or more of voting interests counts as control unless you qualify as a passive investor. The department may rely on a lead-state investigation.
Core definitions clarified for money transmission
Beginning July 1, 2026, the law clarifies key terms for this chapter. It defines individual, person, state, and when a transaction is “in this state.” It explains what a license and licensee are, what counts as money received for transmission, what is an outstanding obligation, who can act as an authorized delegate, and what counts as a payment instrument. These definitions decide who is covered and which obligations and products are regulated.
Rulemaking, repeals, and transition dates
The department may adopt regulations to put this law in place, following the state rulemaking process. Some changes take effect only if section 65 received the required two‑thirds vote. The law repeals listed parts of AS 06.55 on July 1, 2026. It also keeps contracts, rights, and obligations that existed before the change in force starting July 1, 2026.
Virtual currency firms now regulated as transmitters
Beginning July 1, 2026, virtual currency exchange and virtual currency business activity count as money transmission unless you only offer excluded services like pure online access or telecom/network services. The law clarifies which electronic monetary products are treated as stored value and excludes closed‑loop and nonpublic loyalty value. Firms must follow Alaska’s money transmission licensing, consumer, and safety rules.
What counts as virtual currency activity
Beginning July 1, 2026, the law defines virtual currency and excludes rewards that cannot be exchanged for money and game‑only items. It defines administration, exchange, transfer, and control, and covers custody vendors that hold virtual currency for others. It sets how to convert virtual currency to dollars using a U.S. exchange and defines closed‑loop stored value. The chapter also defines the Bank Secrecy Act for compliance.
Sponsors & Cosponsors
Sponsor
Jesse Kiehl
Democratic • Senate
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
(H) FINANCE at 01:30 PM ADAMS 519
4/28/2026House(H) Heard & Held
4/15/2026House(H) FINANCE at 01:30 PM ADAMS 519
4/15/2026HouseAudio/Video
4/15/2026House(H) -- MEETING CANCELED --
4/10/2026House(H) FINANCE at 01:30 PM ADAMS 519
4/10/2026House(H) REFERRED TO FINANCE
5/5/2025House(H) FIN
5/5/2025House(H) READ THE FIRST TIME - REFERRALS
5/5/2025House(S) VERSION: CSSB 86(FIN)
5/2/2025Senate(S) TRANSMITTED TO (H)
5/2/2025Senate(S) EFFECTIVE DATE(S) SAME AS PASSAGE
5/2/2025Senate(S) COURT RULE(S) SAME AS PASSAGE
5/2/2025Senate(S) PASSED Y17 N- E3
5/2/2025Senate(S) READ THE THIRD TIME CSSB 86(FIN)
5/2/2025Senate(S) ADVANCED TO THIRD READING 5/2 CAL
4/30/2025Senate(S) FIN CS ADOPTED UC
4/30/2025Senate(S) READ THE SECOND TIME
4/30/2025Senate(S) RULES TO CALENDAR 4/30/2025
4/30/2025Senate(S) FN1: (CED)
4/14/2025Senate(S) NR: STEDMAN, CRONK
4/14/2025Senate(S) DP: OLSON, HOFFMAN, MERRICK, KIEHL
4/14/2025Senate(S) FIN RPT CS 4DP 2NR SAME TITLE
4/14/2025Senate(S) Minutes (SFIN)
4/11/2025Senate(S) Moved CSSB 86(FIN) Out of Committee
4/11/2025Senate
Bill Text
CSSB 86(FIN)
4/14/2025
SB 86
2/5/2025