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Blockchain Legal Terms — Definitions Every Builder Must Know
The legal terms that determine whether your blockchain project is compliant or criminal. These are not legal advice — consult your attorney for your specific situation.
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Accredited Investor
Under SEC Regulation D, a natural person who meets either: (1) net worth over $1M excluding primary residence, or (2) income exceeding $200,000/year individually or $300,000/year jointly for the past two years. Entity investors have separate qualifications.
AML (Anti-Money Laundering)
The body of law and regulation requiring financial businesses to detect and prevent money laundering. BSA/AML compliance requires a written AML program, designated compliance officer, KYC procedures, transaction monitoring, and SAR filing capability.
Bank Secrecy Act (BSA)
US federal law requiring financial institutions to cooperate with government agencies to detect and prevent money laundering. The primary AML law in the US; administered by FinCEN.
BitLicense
New York State's virtual currency business license, required for any business engaged in virtual currency business activity (exchange, custody, transfer, administration) involving New York residents.
Broker-Dealer
SEC-regulated entity that buys and sells securities on behalf of customers or for its own account. Operating as an unregistered broker-dealer is a federal crime. Certain tokenized security transactions may require broker-dealer involvement.
CFTC (Commodity Futures Trading Commission)
US federal regulator with jurisdiction over commodity futures and derivatives. Bitcoin and Ethereum are considered commodities under CFTC jurisdiction. Crypto derivatives (futures, options) require CFTC authorization.
FinCEN (Financial Crimes Enforcement Network)
US Treasury bureau administering the Bank Secrecy Act. Issues guidance on which crypto businesses are Money Services Businesses (MSBs) and what AML compliance requirements apply.
Howey Test
The four-factor test from SEC v. W.J. Howey Co. (1946) determining if an asset is a security: investment of money, in a common enterprise, with expectation of profits, primarily from others' efforts.
MSB (Money Services Business)
FinCEN classification for businesses providing money services including currency exchange, money transmission, and stored value products. Crypto exchanges and custodial businesses are typically MSBs.
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The legal terms that determine whether your blockchain project is compliant or criminal. These are not legal advice — consult your attorney for your specific situation.
Accredited Investor
Under SEC Regulation D, a natural person who meets either: (1) net worth over $1M excluding primary residence, or (2) income exceeding $200,000/year individually or $300,000/year jointly for the past two years. Entity investors have separate qualifications.
AML (Anti-Money Laundering)
The body of law and regulation requiring financial businesses to detect and prevent money laundering. BSA/AML compliance requires a written AML program, designated compliance officer, KYC procedures, transaction monitoring, and SAR filing capability.
Bank Secrecy Act (BSA)
US federal law requiring financial institutions to cooperate with government agencies to detect and prevent money laundering. The primary AML law in the US; administered by FinCEN.
BitLicense
New York State's virtual currency business license, required for any business engaged in virtual currency business activity (exchange, custody, transfer, administration) involving New York residents.
Broker-Dealer
SEC-regulated entity that buys and sells securities on behalf of customers or for its own account. Operating as an unregistered broker-dealer is a federal crime. Certain tokenized security transactions may require broker-dealer involvement.
CFTC (Commodity Futures Trading Commission)
US federal regulator with jurisdiction over commodity futures and derivatives. Bitcoin and Ethereum are considered commodities under CFTC jurisdiction. Crypto derivatives (futures, options) require CFTC authorization.
FinCEN (Financial Crimes Enforcement Network)
US Treasury bureau administering the Bank Secrecy Act. Issues guidance on which crypto businesses are Money Services Businesses (MSBs) and what AML compliance requirements apply.
Howey Test
The four-factor test from SEC v. W.J. Howey Co. (1946) determining if an asset is a security: investment of money, in a common enterprise, with expectation of profits, primarily from others' efforts.
MSB (Money Services Business)
FinCEN classification for businesses providing money services including currency exchange, money transmission, and stored value products. Crypto exchanges and custodial businesses are typically MSBs.