A while ago, I saw a company called Listia which would permit users to sign up and attain some amount of Credits. These Credits could then be used to purchase real-world items on the site, such as clothes, computers, etc., and have them shipped to you. When you purchased an item, you would have to pay for shipping with United States Dollars. Additionally, the amount in credits of the item you bought would be deducted from you and added to the seller.
It was a "virtual economy", in a way, permitting users to buy and sell items for free by using so-called Listia Credits. This currency was not a cryptocurrency. It could not be redeemed for cash or legal tender in any way.
I'm wondering what the legality of building such a system is in the United States. According to Lexology.com,
In 2013, FinCEN released guidance (the "Guidance") explaining its position on money transmission in the context of virtual currency. An individual or company involved in virtual currency transactions would be considered a money transmitter if (1) it acts as an "exchanger" or "administrator" in the transactions; (2) the virtual currency involved is a "convertible virtual currency" (CVC); and (3) the company facilitates the movement of funds between different persons or locations.
Pertaining to exchanging/issuing:
Importantly for app and game developers, an administrator is an entity that (1) issues a virtual currency and (2) has the authority to redeem the virtual currency. "Issuing" means putting a virtual currency into circulation, for example, by providing users virtual currency for free, in exchange for real currency, or as a promotion. Redeeming means withdrawing the virtual currency from circulation, whether in exchange for in-game/in-app items or features, real-world goods or services, or real currency, or otherwise.
And more specifically,
An administrator would be a money transmitter, however, only if the virtual currency it issues and redeems is a CVC. FinCEN defines a CVC as a virtual currency that either (1) has an equivalent value in real currency or (2) acts as a substitute for real currency.
Based on that, would you say that a company like Listia would be considered a "Money Transmitter" and that they are required to implement a BSA/AML program? Would companies building a similar marketplace today be considered as such? Is the information provided in the quotes correct?
Note that Listia now uses the cryptocurrency XNK, prior to this, however, they used Lista Credits, a virtual in-app only currency.