DFI has recently received an inquiry regarding a person claiming to have a “Bitcoin trader license” issued by the city of Seattle. This license is fraudulent, and most likely represents an attempt to scam the recipient. DFI’s Securities Division, which regulates investment professionals in Washington, is issuing this investor alert to caution consumers about common hallmarks of scams and to provide resources to consult before deciding whether to do business with a particular person.
First, to the Securities Division’s knowledge, there is no such thing as a “Bitcoin trader license” in Washington, or in any other state. Depending on the specifics of their business activities, a person or company that transacts in cryptocurrencies may be required to be registered with the appropriate authorities. However, registration and licensing for financial professionals are typically conducted through state or federal regulatory bodies such as DFI or its counterparts in other states, not through individual cities. The Securities Division does not issue, and is not aware of any other agencies that issue, any license specific to Bitcoin trading.
Before doing business with any person claiming to be a cryptocurrency trader, investors should check the person’s registration status. In this particular case, the falsified “Bitcoin trader license” included a purported “NMLSR” registration number. This appears to be a reference to the Nationwide Multistate Licensing System & Registry, which is a system used by most state regulators for registration of certain types of financial professionals and companies. However, searching the certificate’s license number on NMLS’s website returns no results associated with that number.
Before doing business with a financial professional, you can check their license status yourself in regulator databases, including:
- NMLS’s Consumer Access
- The Financial Industry Regulatory Authority’s Brokercheck
- The National Futures Association’s BASIC
You can also contact the Washington State Department of Financial Institutions, Securities Division at (360) 902-8760. If you live outside of Washington State, contact your state securities regulator.