A foundation created last year to shepherd Bitcoin's software development has received a stern warning from a California financial regulator.
The state's Department of Financial Institutions (DFI) warned the Bitcoin Foundation in a May 30 letter that it is a violation of state and federal law to be involved in money transmission without registering with the U.S. Treasury or California's Commissioner of Financial Institutions… even though the nonprofit Bitcoin Foundation isn't a Bitcoin exchange.
California's DFI oversees banks, credit unions, money transmitters and issuers of payment instruments.
The letter, signed by Senior Counsel Paul T. Crayton, does not accuse the Bitcoin Foundation of violating laws but says the regulator thinks it "may be engaged" in a money transmission business without a license.
Entities lacking a license could be fined up to $1,000 per violation or $1,000 per day under California law and face criminal prosecution, the letter said.
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