Michael Handelsman wrote in a Kelman.Law opinion piece that calling a crypto wallet “noncustodial” does not, by itself, settle whether its operator needs a money transmitter license. Software development alone may fall outside money transmission rules, but added recovery, swap or payment services require a review of what the company does and what control it has over assets.
Federal and state requirements are separate, and the answer depends on the transaction flows and applicable laws. Handelsman notes that FinCEN withdrew a proposed unhosted-wallet reporting and verification rule on October 6, 2026, but says the withdrawal did not create a general licensing exemption for noncustodial businesses.
