Micronesia (Federated States of Micronesia, FSM) has no specific cryptocurrency or digital asset legislation, and no dedicated regulatory authority for virtual assets has been established as of 2025–2026 FSM Government – FSM Government

No licensing or registration regime exists for cryptocurrency businesses, and no entity has been licensed to conduct virtual asset activities in the jurisdiction FSM Government – FSM Government

The country's financial regulatory framework is limited to traditional banking oversight under the Department of Finance and Administration, which has issued no guidance on digital assets FSM Government – FSM Government

Micronesia's foreign affairs capacity includes banking, commercial, and economic relations conducted in its own name, but no virtual asset treaty or international agreement has been concluded The Compact of Free Association between the United States of America and the Federated States of Micronesia

The practical reality is that there is no operational pathway for crypto businesses to achieve regulatory compliance, and no travel-rule implementation exists for virtual asset transfers

The Federated States of Micronesia operates under its Constitution with a national government comprising Legislative, Executive, and Judicial branches, but no specific financial regulator for virtual assets has been designated FSM Government – FSM Government

The Department of Finance and Administration (DFA) serves as the national treasury and financial management body, headed by Secretary Honorable Sihna Lawrence, with contact at PS158, Palikir, Pohnpei State, FM 96941, Phone (691) 320-2640 FSM Government – FSM Government

The Department of Justice, headed by Secretary Honorable Joses Gallen at PS105, Palikir, Pohnpei State, FM 96941, Phone (691) 320-2644/2608, would handle criminal enforcement but has published no virtual asset regulations FSM Government – FSM Government

The FSM National Government has no central bank, and the national currency is the U.S. dollar, with the U.S. Federal Reserve providing monetary services under the Compact of Free Association The Compact of Free Association between the United States of America and the Federated States of Micronesia

The Compact of Free Association, as amended, was contained in Title II, Sec. 201 of the Compact Amendments Act of 2003 (US Public Law 108-188), and establishes that the FSM has capacity to conduct foreign affairs in its own name and right, including banking and commercial relations The Compact of Free Association between the United States of America and the Federated States of Micronesia

Under Section 121(b)(2) of the Compact, the FSM explicitly has capacity to conduct "commercial, diplomatic, consular, economic, trade, banking, postal, civil aviation, communications, and cultural relations," which would encompass any future digital asset arrangements The Compact of Free Association between the United States of America and the Federated States of Micronesia

Micronesia is not a member of the Financial Action Task Force (FATF), and no status assessment by FATF or Moneyval has been published on the official government website FSM Government – FSM Government

The FSM has no published anti-money laundering law specifically addressing virtual assets, and no Financial Intelligence Unit (FIU) is listed among national agencies FSM Government – FSM Government

A National Task Force on Tax Reform was convened by Vice President Palik, indicating ongoing fiscal policy work, but no outcome related to digital assets has been published Vice President Palik Convenes National Task Force on Tax Reform Meeting

The FSM government maintains a national public laws archive through the Congress (cfsm.gov.fm), which lists public laws but contains no virtual asset legislation in the available records 4th Public Laws

No licensing regime exists for cryptocurrency exchanges, custodians, wallets, or any virtual asset service providers in the Federated States of Micronesia FSM Government – FSM Government

No entity has been licensed to conduct virtual asset activities in the FSM, and there is no public registry of authorized crypto businesses FSM Government – FSM Government

The Department of Finance and Administration has not published any application process, capital requirements, or structural requirements for digital asset businesses FSM Government – FSM Government

Under the Compact of Free Association, the FSM's authority over banking and commercial relations is recognized, but no implementing regulations for virtual asset licensing have been enacted The Compact of Free Association between the United States of America and the Federated States of Micronesia

The FSM has four state governments (Chuuk, Kosrae, Pohnpei, and Yap), each with constitutional autonomy, but none has published state-level virtual asset licensing requirements FSM Government – FSM Government

No monetary thresholds, minimum capital, or surety bond requirements exist for crypto businesses because the regulatory framework itself does not exist FSM Government – FSM Government

The FSM National Government's official website lists no "license" or "registration" category for financial technology or digital asset enterprises among its services FSM Government – FSM Government

There is no expected timeline for implementing a licensing regime, as no public consultation or draft law has been announced by the FSM Congress or Executive branch FSM Government – FSM Government

The number of licensed entities in the virtual asset space is zero, and this should be prominently noted by any business evaluating market entry FSM Government – FSM Government

The FSM has not enacted any anti-money laundering (AML) or know-your-customer (KYC) requirements specifically applicable to cryptocurrency or digital asset businesses FSM Government – FSM Government

No customer due diligence (CDD), enhanced due diligence (EDD), or suspicious transaction reporting (STR) obligations exist for virtual asset service providers under FSM law FSM Government – FSM Government

The national government does not list a Financial Intelligence Unit (FIU) or equivalent body responsible for receiving suspicious transaction reports related to digital assets FSM Government – FSM Government

No record retention periods, beneficial ownership disclosure requirements, or PEP (politically exposed persons) screening obligations have been prescribed for crypto entities FSM Government – FSM Government

The Department of Justice has not published any AML guidance or enforcement framework for virtual assets, and its website is noted as being under maintenance FSM Government – FSM Government

The FSM Social Security Administration, the FSM Development Bank, and the National Fisheries Corporation are the only financial-adjacent public bodies listed, and none has jurisdiction over digital asset AML compliance FSM Government – FSM Government

The absence of a national AML framework for virtual assets means no travel-rule requirements (FATF Recommendation 16) have been transposed into FSM law FSM Government – FSM Government

There is no requirement to collect or transmit originator and beneficiary information for virtual asset transfers, as the FSM has not implemented FATF's travel rule FSM Government – FSM Government

No enforcement actions, penalties, fines, arrests, or cases involving cryptocurrency or digital asset businesses have been reported by the FSM Government FSM Government – FSM Government

The Department of Justice has not published any virtual asset-related enforcement actions, and no court rulings on digital assets from the FSM judiciary are available FSM Government – FSM Government

No administrative fines or sanctions have been imposed on any entity for unlicensed crypto activity, because no licensing regime exists to violate FSM Government – FSM Government

The FSM Government's news archive, covering events through August 2026, contains no reports of cryptocurrency-related prosecutions or regulatory actions FSM Government – FSM Government

The U.S. Customs and Border Protection FOIA notice is unrelated to FSM domestic enforcement and does not apply to Micronesian crypto regulation Freedom of Information Act (FOIA) | U.S. Customs and Border Protection

No tax guidance has been issued for virtual assets in the Federated States of Micronesia FSM Government – FSM Government

The FSM has a National Task Force on Tax Reform, convened by Vice President Palik, indicating the national tax system is under review, but no digital asset tax provisions have been announced Vice President Palik Convenes National Task Force on Tax Reform Meeting

The FSM Government does not publish a national income tax code or capital gains tax schedule on its official website, and no rates for crypto gains have been specified FSM Government – FSM Government

No value-added tax (VAT) or goods and services tax (GST) framework for digital asset transactions has been established FSM Government – FSM Government

The Department of Finance and Administration, which oversees fiscal matters, has issued no rulings on the tax treatment of cryptocurrency mining, trading, or staking income FSM Government – FSM Government

The FSM relies on the U.S. dollar as its currency under the Compact of Free Association, but U.S. tax laws do not automatically apply to FSM residents or businesses The Compact of Free Association between the United States of America and the Federated States of Micronesia

No tax treaties or bilateral agreements addressing digital asset taxation between the FSM and other countries have been published The Compact of Free Association between the United States of America and the Federated States of Micronesia

The FSM has no comprehensive AML/CFT framework for virtual assets, meaning businesses cannot achieve compliance with FATF standards, including the travel rule FSM Government – FSM Government

There is no designated regulator for cryptocurrency, leaving businesses without a competent authority for licensing, supervision, or guidance FSM Government – FSM Government

The absence of a Financial Intelligence Unit means no reporting channel exists for suspicious transactions involving virtual assets FSM Government – FSM Government

Businesses operating in the FSM face legal uncertainty because no law defines whether virtual assets are securities, commodities, currency, or property FSM Government – FSM Government

The four state governments (Chuuk, Kosrae, Pohnpei, Yap) may assert separate regulatory authority, creating potential jurisdictional fragmentation and compliance confusion FSM Government – FSM Government

The FSM's foreign affairs capacity under the Compact of Free Association allows it to enter into international agreements on banking and commerce, but no virtual asset treaties have been pursued The Compact of Free Association between the United States of America and the Federated States of Micronesia

The U.S. government's role under the Compact is limited to consultation on foreign affairs and does not extend to regulating FSM domestic virtual asset activities The Compact of Free Association between the United States of America and the Federated States of Micronesia

The U.S. Customs and Border Protection FOIA process change, effective January 22, 2026, is irrelevant to FSM crypto regulation and does not provide any compliance pathway for Micronesian virtual asset businesses Freedom of Information Act (FOIA) | U.S. Customs and Border Protection

The practical risk is that any virtual asset business in the FSM operates entirely outside any legal framework, facing potential civil liability, criminal exposure, and inability to access banking services FSM Government – FSM Government

No public consultation, draft legislation, or regulatory roadmap for digital assets has been announced, meaning the regulatory vacuum is likely to persist through 2026 and beyond FSM Government – FSM Government

The tax reform task force may eventually address virtual assets, but until it publishes recommendations, businesses have no certainty on tax treatment Vice President Palik Convenes National Task Force on Tax Reform Meeting

Businesses seeking to comply with international standards such as FATF Recommendation 16 (travel rule) have no domestic legal mechanism to do so, creating reputational and correspondent banking risks FSM Government – FSM Government

The FSM's official government services list includes no category for financial technology or virtual asset businesses, indicating the government has not prioritized this sector FSM Government – FSM Government

FSM Government – FSM Government

The Compact of Free Association between the United States of America and the Federated States of Micronesia

Vice President Palik Convenes National Task Force on Tax Reform Meeting

Freedom of Information Act (FOIA) | U.S. Customs and Border Protection