Web3 companies seeking to operate legally across the United States face a costly regulatory maze that can consume millions of dollars and years of development time. Neil Bergquist, co-founder and CEO of Coinme, has witnessed this challenge firsthand during his company's decade-long journey to secure money transmitter licenses in 37 states.
"We would have to go to every state and say, 'Here's our business model. Here's our product. Do you regulate us?' Some states would say, 'No, because Bitcoin's not money, and we only regulate money.' Other states would say, 'We don't know. Let us get back to you," Bergquist explains. What emerged from this arduous process was an infrastructure that now serves as a regulatory shortcut for companies looking to enter the crypto space without navigating the licensing labyrinth themselves.
The Million-Dollar Licensing Problem
Cryptocurrency businesses operating in the United States must obtain money transmitter licenses (MTLs) in each state where they conduct business. According to compliance experts, obtaining these licenses across multiple states can cost between $10 million and $35 million, with individual state applications ranging from $10,000 to $500,000 in bonds alone.
Each state maintains its own regulatory framework, creating a complex patchwork of requirements. Montana remains the only state that doesn't require money transmitter licensing for cryptocurrency businesses, while others like New York impose additional BitLicense requirements.
For startups and emerging Web3 companies, these costs represent a significant barrier to entry. "To go create all that infrastructure yourself is expensive, risky, redundant, and it doesn't make sense unless you're doing billions in volume," Bergquist notes.
Coinme's Regulatory Infrastructure
Coinme's approach to solving this problem began in 2014 when Bergquist and his team worked directly with Washington State regulators to create the nation's first virtual currency money transmitter license. What started as a regulatory necessity has evolved into a comprehensive compliance infrastructure that other companies can leverage.
"We now have 37 state money transmitter licenses, and a handful of states where we operate without a license because they don't regulate our business model," Bergquist explains. The company's crypto-as-a-service (CaaS) platform allows partners to offer cryptocurrency services while operating under Coinme's existing licenses and compliance framework.
The infrastructure includes know-your-customer (KYC) compliance, anti-money laundering (AML) protocols, transaction monitoring, and the regulatory reporting required in each jurisdiction. Companies can integrate these capabilities through Coinme's API suite rather than building their own compliance systems from scratch.
Recent data from the Financial Crimes Enforcement Network shows that cryptocurrency businesses must register as Money Services Businesses (MSBs) at the federal level and maintain compliance across all operating jurisdictions. Coinme's platform handles these requirements automatically for partner companies.
Real-World Implementation
The practical benefits of this approach became evident in May 2025 when Exodus, a leading self-custody wallet provider, launched XO Pay using Coinme's infrastructure. The integration allowed Exodus to offer direct cryptocurrency purchasing within its mobile app without obtaining its own money transmitter licenses.
"By creating a Web2 checkout experience in a Web3 self-custody wallet, Exodus has set a new bar for crypto user experience," Bergquist said about the partnership.
XO Pay supports ten major cryptocurrencies and accepts payments through Visa, Mastercard, Apple Pay, and Google Pay across 48 states. The service launched within weeks rather than the years typically required for independent licensing.
The API-First Strategy
Bergquist's team designed their platform around a modular API architecture that allows companies to select specific compliance capabilities based on their business models. Gaming companies might integrate token purchase and redemption features, while financial institutions could focus on stablecoin services for cross-border payments.
"We're a platform that provides crypto infrastructure. That infrastructure includes the ability to create an account and conduct KYC so that Coinme and our partners can be compliant with various state and federal regulations," Bergquist explains.
The API-driven approach addresses a fundamental challenge in Web3 development: the technical complexity of blockchain integration combined with regulatory compliance requirements. Most companies lack the specialized expertise in both cryptography and financial regulations needed for independent implementation.
According to industry projections, international B2B blockchain transactions could exceed $1.7 billion by 2025, with much of this activity flowing through standardized API interfaces rather than custom implementations.
Time and Cost Advantages
The financial benefits of leveraging existing infrastructure become clear when compared to independent licensing timelines. A typical money transmitter license application can take 6-18 months per state, with some states requiring audited financial statements, surety bonds, and ongoing reporting requirements.
Coinme's partners can deploy cryptocurrency services within weeks of API integration. For companies that have raised $10 million or less in funding, the savings in both time and capital can determine whether their products reach the market.
"No product does billions in volume right out of the gates, so being able to leverage that infrastructure is going to inspire a lot of entrepreneurs," Bergquist observes.
Broader Industry Implications
The regulatory infrastructure developed by companies like Coinme reflects a maturing cryptocurrency industry where compliance has become a competitive advantage rather than a barrier. As federal and state regulators provide clearer guidance on digital asset businesses, companies with established licensing frameworks are positioned to capture market share from new entrants.
For Web3 companies evaluating their regulatory strategy, the choice between building independent infrastructure and partnering with licensed providers increasingly favors the latter approach. The capital and time savings allow companies to focus resources on product development and customer acquisition rather than regulatory compliance.
Bergquist's decade-long investment in regulatory infrastructure has created what amounts to a licensing highway for cryptocurrency businesses. As the Web3 ecosystem continues expanding, this infrastructure-as-a-service model may become the standard approach for companies seeking to balance innovation with compliance requirements.
