Regulatory compliance and legal requirements for Dusty crypto wallet operations. Covers KYC/AML, money transmission licensing, custody regulations, and tax reporting obligations for multi-exchange crypto consolidation services.
Navigate regulatory requirements for operating a crypto dust consolidation wallet service.
Dusty handles crypto assets across multiple exchanges and blockchains. This creates regulatory obligations in most jurisdictions.
When Required:
US Requirements:
International:
Required for:
Implementation:
Identity Verification:
- Government-issued ID
- Proof of address
- Liveness check (selfie)
Ongoing Monitoring:
- Transaction screening
- PEP (Politically Exposed Persons) checks
- Sanctions screening (OFAC, UN, EU)
- Suspicious Activity Reports (SARs)
Critical Decision:
| Model | Regulatory Burden | User Experience |
|---|---|---|
| Non-custodial (user controls keys) | Low - you're just software | User manages keys |
| Custodial (you hold keys) | High - you're a bank/payment institution | Seamless but regulated |
Recommendation for Dusty MVP: Start non-custodial. Users hold their own keys. Dusty only orchestrates API calls on their behalf. This dramatically reduces regulatory burden.
Employee Payments in Crypto:
User Dust Consolidation:
API Usage:
Geographic Blocking:
Run this checklist before each phase:
# Are we touching customer funds?
USER_HOLDS_KEYS=true # Set false if you custody
# Are we transmitting between parties?
PEER_TO_PEER_ENABLED=false
# What's our transaction volume/month?
VOLUME_USD=0 # Update monthly
# Do we have US users?
US_USERS=true
# Do we have EU users?
EU_USERS=false
US:
International:
KYC Providers:
Minimal Compliance (Non-custodial):
Full Compliance (Custodial):
For Dusty 2026:
This keeps 2-year runway focused on product, not legal.
When to call a lawyer: