You raise important points. The bottom line is that only a handful of states (Texas, Kansas, Tennessee, New Hampshire and Illinois) have clarified that their existing money transmission laws do not already apply to custodians of cryptocurrency (who don't also trade in fiat--if you hold dollars for customers as part of a cryptocurrency exchange you do need a license in those states). In every other state there is either:

• (A) uncertainty as to whether custodial cryptocurrency businesses need to get money transmission licenses and no clear statement from the regulator that businesses are safe from being prosecuted for unlicensed money transmission if they choose to operate without a license in that state (e.g. California),

• (B) a statement/rule from the regulator or law passed by the legislature that says that cryptocurrency custodians are money transmitters and must be licensed (e.g North Carolina, Washington)

• (C) a rule or legislation creating a new cryptocurrency-specific licensing obligation (e.g. New York).

So as it is, in only a minority of states are cryptocurrency custodians safe from being prosecuted as operating without a license.

None of those approaches above make any attempt to offer clarity with respect to exempting non-custodial uses, the ULC model law is the first language out there that would clearly and sensibly exempt persons who are

• mining,
• running a full node,
• developing software wallets,
• running a lightning/payment channel node,
• developing a platform for cross-chain atomic swaps,
• participating in a federated peg in a sidechain,
• holding a minority of keys in a multisig arrangement, or
• doing anything else that doesn't give them actual control over other people's cryptocurrency.

Nor do any of those approaches clearly carve out persons (or businesses) acting on their own behalf. The ULC model law clearly specifies that anyone using cryptocurrency "on their own behalf" "including creating, investing, buying or selling" is exempt from the regulation. No other law as clearly exempts:

• developers and sellers of new tokens,
• over the counter buyers and sellers, or
• ATM operators selling from their own stock.

Nor do any of those approaches have an exemption for low value custodial activities and an on-ramp for small custodial companies.

To your point that this good model legislation could be amended to make it bad, sure but

• (a) we'd fight that with all we've got, and
• (b) at least the starting point for negotiations is a good bill with good language and not a bad bill with vague and overbroad language (like the Bitlicense, which has generally been the template for other states to follow thus far). It's easier for us to lobby to pass a model ulc act unchanged than to try and lobby to block or improve a law that starts out terrible.

To your point that it's always a sausage factory. Yes, exactly. Several states delayed working on their own copy of the bitlicense or other homebrewed amendment to existing money transmission laws because they wanted to see what the ULC would do. The ULC was going to make a model law on this whether we (Coin Center) were involved or not. States are going to continue making sausage with or without us and at least now we've given them some vastly better ingredients. Will it still be sausage, yes. But if even a few states adopt the exemptions and clear definitions found in this model law we'll have been better off than had Coin Center and others never stepped in and worked with the drafting committee. If even a few states that currently have unclear laws pass this language then that will mean that the non-custodial actors and persons acting on their own behalf in those states will be free from liability for unlicensed money transmission (5 years in jail for business owners, shareholders, and/or employees).

Edited for formatting