Crypto ATM / kiosk operator in Puerto Rico

Office of the Commissioner of Financial Institutions (OCIF): Responsible for licensing and regulating money services businesses (MSBs) and digital asset custody services

Puerto Rico Money Services Business Act (Act No. 17-2016): This act regulates money services businesses in Puerto Rico, including licensing, examination, and enforcement. VASPs operating as money transmitters in Puerto Rico are typically required to obtain a license under this Act and comply with its provisions, which include AML program requirements.

Office of the Commissioner of Financial Institutions (OCFI) Regulations: OCFI issues regulations and circular letters to implement Act 17-2016 and other financial laws, which would apply to licensed entities, including VASPs.

Bank Secrecy Act (BSA) (31 U.S.C. § 5311 et seq.): This is the foundational AML legislation in the U.S. It requires financial institutions (including MSBs/VASPs) to keep records and file reports on certain financial transactions.

FinCEN Regulations (31 CFR Chapter X): FinCEN, a bureau of the U.S. Department of the Treasury, issues regulations implementing the BSA.

Guidance on Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (FIN-2013-G001, March 18, 2013): This initial guidance clarified that exchangers and administrators of virtual currency are "money transmitters" under the BSA.

Threshold: A SAR must be filed for any transaction(s) conducted or attempted by, at, or through the VASP that involves at least $5,000 in funds or other assets, if the VASP knows, suspects, or has reason to suspect that the transaction:

Required License: Money Transmitter License (MTL) from the OCFI.

FinCEN: Also requires MSB registration (as a money transmitter) with FinCEN.

Comprehensive AML Program: Licensed entities must establish and maintain a robust Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) program. This includes:

Net Worth: Applicants must demonstrate a minimum net worth. For a Puerto Rico Money Transmitter License, Act No. 93, Article 5, generally requires a minimum net worth of $100,000 for the first location and an additional $50,000 for each additional location or authorized agent (up to a maximum of $500,000).

Surety Bond: Licensees must maintain a surety bond to protect consumers. The bond amount is determined by the Commissioner based on the anticipated volume of business, typically ranging from a minimum of $10,000 up to a maximum of $500,000.

Physical Office: Licensees generally need to maintain a physical office or place of business within Puerto Rico.

Agent for Service of Process: A designated agent for service of process in Puerto Rico is usually required.

Business Plan: A detailed business plan outlining services, target market, operational procedures, risk management, and financial projections.

Management Experience & Background Checks: Key personnel (directors, officers, significant shareholders) will undergo thorough background checks (including criminal history, financial history, and regulatory disciplinary actions).

Financial Statements: Audited financial statements for existing businesses, and projected financials.

OFAC Compliance: Compliance with sanctions administered by the Office of Foreign Assets Control (OFAC) is also mandatory.

Reporting suspicious transactions (SARs) and large cash transactions (CTRs) to FinCEN, as required by the Bank Secrecy Act (BSA) and its implementing regulations (31 CFR Chapter X).

For Individuals: Obtaining name, date of birth, residential address, and an identification number (e.g., Social Security Number, passport number, alien identification card number).

Risk-Based Approach: Conducting due diligence commensurate with the risks presented by the customer relationship. Higher-risk customers (e.g., those from high-risk jurisdictions, politically exposed persons - PEPs, or engaging in complex/unusual transactions) require Enhanced Due Diligence (EDD).

Required License: The application of the Money Transmitters Act to purely crypto-to-crypto exchanges can be a grey area in some jurisdictions. However, OCFI, like many other U.S. state regulators, generally takes a broad interpretation that if the virtual assets are considered "value" or "funds" and the entity facilitates their transfer for others, an MTL is likely required. It is best practice to assume an MTL is needed or seek specific guidance from OCFI.