The cannabis industry in the U.S. state of Washington has been served by several banks and credit unions since Initiative 502 passed in 2012, legalizing production, distribution, retail sales and possession in the state.
Three banks and Three credit unions – O Bee Credit Union in Tumwater since 2014, Numerica Credit Union in Spokane and Salal Credit Union in Seattle – handle most of the accounts. As of 2017 [update] , the state took in 95% of its cannabis tax revenue through banks (vice cash) and the Washington State Department of Revenue requires electronic funds transfer for tax payment, unless the taxpayer is unable to open a bank account. [1] [2]
Washington's governor and United States Senators have attempted to preserve U.S. Department of the Treasury FinCEN rules in place since 2014 allowing banks to do regulated transactions with the industry, despite conflicting laws on legality at the Federal level. [3] [4]
Some Washington cannabis business, particularly at point of sale, is conducted in cryptocurrency. [5] Some use Square point-of-sale system, [6] although it has also been reported that PayPal and Square will terminate accounts from cannabis-related businesses. [7] A cashless transaction system was created by POSaBIT and used in Washington cannabis establishments c. 2017. It would convert US dollars from a customer's debit card swipe to cryptocurrency for expenditures made at the retail establishment. [8] [9]
Money laundering is the process of illegally concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions with varying definitions. It is usually a key operation of organized crime.
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.
The Bank Secrecy Act of 1970 (BSA), also known as the Currency and Foreign Transactions Reporting Act, is a U.S. law requiring financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, file reports if the daily aggregate exceeds $10,000, and report suspicious activity that may signify money laundering, tax evasion, or other criminal activities.
Digital currency is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency and central bank digital currency. Digital currency may be recorded on a distributed database on the internet, a centralized electronic computer database owned by a company or bank, within digital files or even on a stored-value card.
Virtual currency, or virtual money, is a digital currency that is largely unregulated, issued and usually controlled by its developers, and used and accepted electronically among the members of a specific virtual community. In 2014, the European Banking Authority defined virtual currency as "a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically." A digital currency issued by a central bank is referred to as a central bank digital currency.
Internal Revenue Service, Criminal Investigation (IRS-CI) is the United States federal law enforcement agency responsible for investigating potential criminal violations of the U.S. Internal Revenue Code and related financial crimes, such as money laundering, currency violations, tax-related identity theft fraud and terrorist financing that adversely affect tax administration. While other federal agencies also have investigative jurisdiction for money laundering and some Bank Secrecy Act violations, IRS-CI is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code, in a manner intended to foster confidence in the tax system and deter violations of tax law. Criminal Investigation is a division of the Internal Revenue Service, which in turn is a bureau within the United States Department of the Treasury.
Bitcoin is a protocol which implements a public, permanent, and decentralized ledger.
The National Cannabis Industry Association (NCIA) is an American non-profit organization based in the District of Columbia, with an additional office in Denver, Colorado. NCIA is the largest cannabis trade association in the U.S. and the only organization representing state-sanctioned cannabis-related businesses at the federal level. Its mission is "to promote the growth of a responsible and legitimate cannabis industry and work for a favorable social, economic and legal environment for that industry in the United States." The organization was founded in late 2010 and has been described as the "first national trade group for the cannabis industry" in the United States.
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It is a decentralized system for verifying that the parties to a transaction have the money they claim to have, eliminating the need for traditional intermediaries, such as banks, when funds are being transferred between two entities.
Bitstamp is a European cryptocurrency exchange founded in 2011. It is the world’s longest-running cryptocurrency exchange. It allows trading between fiat currency, Bitcoin and other cryptocurrencies, such as USD, EUR, GBP, Ethereum, Litecoin, Ripple, Bitcoin Cash, Algorand, Stellar, and USD Coin. Business operations are conducted from its registered headquarters in Luxembourg City, with a satellite office in Ljubljana.
Bitcoin is a cryptocurrency, a digital asset that uses cryptography to control its creation and management rather than relying on central authorities. Originally designed as a medium of exchange, Bitcoin is now primarily regarded as a store of value. The history of bitcoin started with its invention and implementation by Satoshi Nakamoto, who integrated many existing ideas from the cryptography community. Over the course of bitcoin's history, it has undergone rapid growth to become a significant store of value both on- and offline. From the mid-2010s, some businesses began accepting bitcoin in addition to traditional currencies.
Bitcoin ATMs are kiosks that allow a person to purchase Bitcoin and other cryptocurrencies by using cash or debit card. Some Bitcoin ATMs offer bidirectional functionality, enabling both the purchase of Bitcoin and the sale of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account to transact on the machine.
Ripple Labs, Inc. is an American technology company which develops the Ripple payment protocol and exchange network. Originally named Opencoin and renamed in 2015, the company was founded in 2012 and is based in San Francisco, California.
A cryptocurrency tumbler or cryptocurrency mixing service is a service that mixes potentially identifiable or "tainted" cryptocurrency funds with others, so as to obscure the trail back to the fund's original source. This is usually done by pooling together source funds from multiple inputs for a large and random period of time, and then spitting them back out to destination addresses. As all the funds are lumped together and then distributed at random times, it is very difficult to trace exact coins. Tumblers have arisen to improve the anonymity of cryptocurrencies, usually bitcoin, since the digital currencies provide a public ledger of all transactions. Due to its goal of anonymity, tumblers have been used to money launder cryptocurrency.
United States virtual currency law is financial regulation as applied to transactions in virtual currency in the U.S. The Commodity Futures Trading Commission has regulated and may continue to regulate virtual currencies as commodities. The Securities and Exchange Commission also requires registration of any virtual currency traded in the U.S. if it is classified as a security and of any trading platform that meets its definition of an exchange.
KIND Financial is an American company focused on providing financial technology services for the cannabis industry.
Bitcoin is a digital asset designed by its pseudonymous inventor, Satoshi Nakamoto, to work as a currency.
Tokken is a payment system and mobile app most known for being a legal and secure option for businesses transactions within the cannabis industry, because of its compliance with bank requirements. The startup company was created by Lamine Zarrad, a former regulator at the Office of the Comptroller of the Currency.
Hypur is a Scottsdale-based payment and banking technology platform that was built to enable financial institutions to responsibly and sustainably bank highly regulated industries, such as cannabis.
Salal Credit Union is a NCUA-insured credit union headquartered in Seattle, Washington. It is the 20th largest credit union in Washington with assets totaling $656.18 million and providing banking services to more than 40,000 members.
You must also pay your taxes through My Account. Per Revised Code of Washington 82.32.080, businesses are required to electronically pay excise tax returns unless a waiver has been granted. Failure to pay the excise tax returns electronically may result in a penalty being assessed.
