Stripe’s crypto onramp handles KYC for the fiat-to-crypto purchase itself. Their website says the company acts as the merchant of record, handling regulatory requirements and compliance.

It looks like people can create exchanges in the USA with implementing onramp, but where I think the hiccup would come from is holding a master wallet and generating wallets for customers to send and receive from, is consider custody. My understanding is that custodying customer funds generally makes you a money transmitter in the US, which means FinCEN registration plus state-by-state licensing. I don’t think the onramp gets any company out of that. I could be wrong though as I am not a lawyer and don’t have experience in this market.

The only creative way to sidestep the custody issue entirely: a non-custodial front end on top of a licensed exchange’s API.

Is what I stated above correct? Am I missing something here? As I am just surprised people have not taken advantage of the onramp.

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