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Can I offer a cryptocurrency as a form of payment without violating financial regulations in Texas? What are the requirements?

Based on the provided context documents, it appears that offering a cryptocurrency as a form of payment may be subject to certain financial regulations in Texas. Here are the requirements that you need to consider:

Texas Crowdfunding Portal Registration and Activities of Small Business Development Entities [1.1]

  • A Registered Small Business Development Entity must limit the securities offered and sold on its Crowdfunding Web Portal to those of issuers located within its service area.
  • Such securities must be exempt from securities registration pursuant to §139.25 of this title (relating to Intrastate Crowdfunding Exemption) and/or §139.26 of this title (relating to Intrastate Crowdfunding Exemption for SEC Rule 147A Offerings).

Sale of Securities to Nonresidents [2.2]

  • The offer and sale of securities by an issuer or its selling agent to a non-Texas resident not present in Texas when the offer is made is exempt from the securities registration provisions of the Securities Act.

Accredited Investor Exemption [2.5]

  • Any offer or sale of a security by an issuer in a transaction that meets the requirements of this section is exempted from the securities registration requirements of the Texas Securities Act and exempted from the filing requirements contained in the Texas Securities Act, §22.A, and Chapter 137 of this title (relating to Administrative Guidelines for Regulation of Offers).
  • Sales of securities shall be made only to persons who are or the issuer reasonably believes are accredited investors. “Accredited investor” is defined in §107.2 of this title (relating to Definitions).

Payment Processors [3.1]

  • A payment processor that receives funds from a consumer on behalf of a consumer-facing entity that either sells goods or services other than money services or accepts charitable donations does not need a license under Chapter 151, provided that:
    • the consumer-facing entity, upon receipt of funds by the payment processor, immediately either:
      • provides the purchased goods and services; or
      • credits the consumer for the full amount of the funds received by the payment processor, which credit is not revocable by the consumer-facing entity, and evidences this credit in writing; and
    • if the transaction involves goods or services, the consumer-facing entity is obligated to provide the purchased goods and services regardless of whether the payment processor transmits the funds.

Based on the above regulations, it is unclear whether offering a cryptocurrency as a form of payment would be subject to securities regulations in Texas. However, if the transaction involves goods or services, a payment processor that receives funds from a consumer on behalf of a consumer-facing entity that either sells goods or services other than money services or accepts charitable donations does not need a license under Chapter 151, provided that the consumer-facing entity immediately provides the purchased goods and services or credits the consumer for the full amount of the funds received by the payment processor, which credit is not revocable by the consumer-facing entity, and evidences this credit in writing. It is recommended that you consult with a legal expert to determine the specific requirements and regulations that may apply to your situation.

Source(s):
Jurisdiction

Texas