Massachusetts Crypto Regulations (2026): Licensing & Taxes

Quick Answer: Massachusetts Crypto Regulations

Massachusetts lacks a standalone digital asset law; existing statutes apply:

• Money transmission licensing under M.G.L. c. 169 applies to many crypto businesses, enforced by the Division of Banks (DOB).
• Securities regulation under M.G.L. c. 110A applies when a crypto asset qualifies as a security, enforced by the Securities Division.
• State income tax under M.G.L. c. 62 generally follows federal treatment, treating virtual currency as property and every disposition as a taxable event.
• Consumer protection under M.G.L. c. 93A grants the Attorney General's Office broad authority over deceptive practices.

Federal obligations, per IRS Notice 2014-21 and Rev. Rul. 2019-24, establish the baseline for Massachusetts income tax. State and federal obligations apply concurrently; neither can be ignored.

Licensing and Registration Requirements for Crypto Businesses in Massachusetts

Money Transmitter Act (M.G.L. c. 169)

M.G.L. c. 169, the Massachusetts Money Transmitter Act, requires licensure from the Division of Banks (DOB) for entities engaged in "money transmission." The DOB interprets "money transmission" to include transmitting virtual currency on behalf of others, particularly when a business takes custody of customer funds, even temporarily.

Businesses evaluating M.G.L. c. 169 licensing obligations often include:

• Centralized cryptocurrency exchanges that hold customer assets
• Crypto payment processors that accept and forward digital currency on behalf of merchants
• Custodial wallet providers
• Over-the-counter crypto trading desks

The DOB has not published specific transaction volume thresholds for licensure. Consult the Massachusetts Division of Banks for current thresholds and application requirements, which vary by business model and are subject to change.

What Is Excluded

Non-custodial activity typically falls outside M.G.L. c. 169. If a software or protocol never takes control of a user's private keys or funds, the money-transmitter framework is unlikely to apply. Cryptocurrency mining, which involves producing new coins rather than transmitting funds for others, also generally falls outside the money-transmission definition. These are fact-specific determinations. Confirm your specific business model with the DOB or qualified legal counsel before relying on a general exclusion.

Applying for a DOB License

The DOB utilizes the Nationwide Multistate Licensing System (NMLS) for money transmitter applications. Required materials typically include a business plan, audited financial statements, a surety bond, and principal background checks. Specific bond amounts and net-worth requirements vary by application. Consult the Massachusetts Division of Banks (www.mass.gov/orgs/division-of-banks) for current application checklists and fee schedules.

Securities Regulation Under M.G.L. c. 110A

If a crypto asset meets the definition of a security under Massachusetts law, the Massachusetts Uniform Securities Act (M.G.L. c. 110A) applies. The Securities Division enforces this statute. Platforms offering, selling, or advising on crypto assets that qualify as securities must register or qualify for an exemption under M.G.L. c. 110A.

The Securities Division actively enforces this statute, exemplified by its 2021 administrative complaint against Coinbase for unregistered securities activity. This action signaled Massachusetts' aggressive application of securities laws to digital assets. Businesses offering yield-bearing crypto products, token sales, or crypto-denominated investment contracts should consult the Securities Division or legal counsel before operating in Massachusetts.

State-Level Tax Implications for Cryptocurrency in Massachusetts

Income Tax Conformity (M.G.L. c. 62)

M.G.L. c. 62 imposes a personal income tax. The Massachusetts Department of Revenue (DOR) conforms to federal treatment of virtual currency as property, consistent with IRS Notice 2014-21. Consequently, every federal taxable disposition – including trading, spending on goods or services, or selling for fiat – constitutes a taxable event for Massachusetts income tax.