The California Department of Financial Institutions, which oversees banks, credit unions, and other financial organizations operating in the state, sent a cease-and-desist letter (see below) last month to the foundation accusing it of "engaging in the business of money transmission without a license or proper authorization."
If found to be in violation of the California Financial Code, the Seattle-based foundation could be fined up to $2,500 a day per violation, in addition to criminal prosecution, according to Forbes, which first reported the story. The report noted that federal law prohibits engaging in money transmission without the appropriate state license or registration with the Treasury Department.
The letter, which was dated May 30, states that the Bitcoin Foundation had 20 days to comply with the order. The article was written by Jon Matonis, who sits on the Bitcoin Foundation's board of directors, but did not indicate whether the foundation had addressed the department's concerns.
CNET contacted the Bitcoin Foundation for comment and will update this report when we lean more.
Matonis defended the foundation in his article and suggested the letter was misguided:
Source : Cnet.