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PayBase Operating Illegally without MSB Licenses

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Coin Fire’s series of investigative reports about Paycoin and PayBase continues with the revelation today that PayBase, which has acted as a money transmitter business, does not have the required licenses in all the states they operate.

While the company applied for federal MSB status, acknowledged by FinCEN on 12/29 (original file was 12/26), they have not received a single MSB license in a single state that responded to our request in the United States as of January 21st. The revelation opens a potential legal can of worms for the company who has operated as a MSB since it opened and has done so without the proper licenses.

MSB licensing is a long and complicated process in many states while it is fast and as simple as paying an application fee and providing the relevant paperwork in others.

Coin Fire investigative reporters have checked with state regulators and we are sharing the results of our information requests with each state below. Coin Fire is also publishing the certified documents (when they were provided to our editors) and each regulator’s contact details so that others may verify the authenticity of the information obtained.

Simply having federal MSB status does not qualify a business such as Paybase to do business in each individual state. A state license is required in most states before any money transmitting can take place and if customers are in a state where a license is not yet acquired, it can have serious repercussions on the company.

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Every state that responded to Coin Fire’s current requests about license status has responded that the company is not licensed.

This lack of licensing certainly will not help Paybase given the current regulatory environment and the current investigations taking place against Paybase, Cantor Fitzgerald’s Stuart Fraser and Mr. Homero J. Garza at various regulatory organizations.

Coin Fire is a cryptocurrency news site started on June 6th of 2014. The site focused on hard-hitting investigative stories. Coin Fire was acquired by 99Bitcoins on October 2015.

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31 comments on “PayBase Operating Illegally without MSB Licenses”

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  1. Paycoin is a total scam. I seriously have no sympathy left for anyone still in it at this point.

    Thanks Coinfire for exposing this sham for what it is.

  2. what about the other exchangers operating in the space w/o MSB licenses? coinbase, bitstamp, bitfinex, etc?

    1. ‘Stamp and Finex aren’t US based. I haven’t been able to find anything on CoinBase or Cryptsy involving state level registration, although both clearly are registered at the federal level.

  3. Come on, this is actually rookie reporting here. They have 180 days from conducting the MSB activity to register with the appropriate state, government, or agency. This is identified in Fincen’s statutes.

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