Topic: Legality of sending cryptocurrency as payment for completing online surveys? (Read 149 times)

According to this link:


The information on the page was updated on 2017. If nothing else, it looks like it will be safer on California than in New York. This is only if faucets are considered money transmitters though, which I doubt. I can't find any concrete information on the subject.

There's a guide to setting up faucets here though. I don't know if the author is based in the US, but if you've hit a dead end, why not try to ask them about the legal aspects of running one?

You are paying people for something they have done for you
You are not accepting and sending the fund on someone's behalf , so I don't think you will be consider as money transmitter
You are most likely need to comply more to business regulations in the category advertiser/surveyor

if we are talking about cryptocurrency, we are not actually "sending money to anyone in the world"
we simply moving balance from an address to another address in the blockchain, blockchain has no nationality
when you do that simultaneously with accepting and converting fiat back and forth to crypto
then I believe you should comply with US Fincen or CA state laws and must have money transmitter and/or remittance license
also must follow the standard KYC AML procedure

Ok, doing some googling I see this:

https://themerkle.com/is-it-legal-to-run-a-bitcoin-faucet-as-us-citizen/

I take it this is still current?  Any thoughts about running a "faucet-like-service" in California vs New York?

Are you saying faucets don't generally need to worry about running into problems with the KYC/AML laws mentioned by cellard?  I don't know much about faucets.. eg, do they usually run "above-board" in the US, or do they usually run offshore and try to evade US law enforcement?

I was thinking that if that were the case, I could collect store users' IP addresses, and even ask for their email addresses in order to have something to show if any law enforcement was suspicious of the payouts being used for money laundering or otherwise illicit purposes.

I see this as a faucet but with a different running,  method. I don't think you need any license or permission from any party to run this project.
Just consider it as a faucet

The way I see it, you are offering a service that gives people money in return, so to speak, these people including you are gaining some revenue for whatever task it is that they are doing. It doesn't matter if you're paying with crypto or not, Fincen and (probably) CA laws would still ask you to comply into their AML/KYC regulations, alongside any legal requirements that needs to be passed in order for your service to go live. Essentially, it's just the same as other review sites there is. The only thing different is that you're paying with crypto and not fiat.

Well, one key difference I can see is that Paypal complies with KYC/AML regulations. Whatever money they send out through Paypal will be completely verifiable and traceable to an identity. Things will be different with crypto because there's really no way to know where money is going. Authorities could easily accuse you of funneling money out to somewhere or something.

That's just my two satoshis on your issue though. If this is a big operation, you should be getting a lawyer anyway.

Thanks for the thoughtful reply!!


Yeah exactly.  It would be paying people a reasonable amount of money for their time to give valuable market feedback.  For example, giving them $5 worth of crypto for filling out a survey that might take them 5-10 minutes.


When you say huge amounts of money, do you mean overall or transacting with a single individual?  It should always be a low amount ($5 / survey) per individual recipient, but if the site became popular then it could add up to a lot of money.  I guess maybe the answer is that if the site starts to become popular, go hire a lawyer?


Would they be any more complicated that for a site like Pinecone Research that is probably paying out millions to fill out surveys?  I guess my real question is: are there any additional legal complications to paying out in cryptocurrency vs paying out in paypal or other means?  (maybe I should also research the legal implications of simply reimbursing people for filling out surveys via PayPal as opposed to with cryptocurrency)

It seems to me like there shouldn't be, as long as the system can't be abused for money laundering or criminal activity, which is what the Fincen money transmitter laws are trying to prevent.  Since the website would have an incentive to make sure that the users gave thoughtful responses, since otherwise the survey responses would be useless, it would be an effort along the same lines of preventing potential criminals that want to accumulate anonymous money for illicit purposes.

I guess as long as someone is working to earn money, it can't be money laundering.  And so I can't see how Fincen or anti-money transmitting laws would be relevant to this.

I guess it could be seen as an investment in marketing. You are basically using a prize to bring people into your website to increase traffic... it would be like when Youtubers do giveaways to do certain things in order to increase traffic.

I wouldn't worry unless I was dealing with huge amounts of money, but try to be sure that things are legal, otherwise you may face problems in the future. I would look for certain thresholds. Like looking for certain limits in which a giveaway may turn into something else if you are moving massive amounts of money in terms of prize payouts for filling the survey in this case. If you have an huge site and you are paying millions worth of crypto from people filling your surveys, things may get complicated.

I was thinking about setting up a website that would ask people to anonymously fill out online marketing surveys and would reimburse them with a small amount of Litecoin for their time. They would just need to provide a public wallet address to receive the payment. It would be similar to PineconeResearch where users receive $3 for filling out a 10 minute survey, but w/ cryptocurrency instead of Paypal or Virtual Visa Debit cards.

If the servers are based in California and the website is sending money to anyone in the world, would this run into any money transmitter license issues with US Fincen or CA state laws?

As far as I understand, you're only considered a money transmitter if you're selling money. Businesses that take payment in cryptocurrency don't need a money transmitter license, and I'm assuming that businesses that are remitting payments in cryptocurrency don't need one either... or is it more complicated than that?