What I mean is that this law which is intended to prevent fraud does nothing of the sort. All it does is guarantee that the people who commit fraud were able to pay the bond. What's the point? If they do commit a fraud, they'll probably steal much more than the value of the bond anyways. All this regulation really does is stifle competition, I'd eliminate it altogether.
The risk that the bond mitigates is not that your money transfer enterprise is a criminal conspiracy. It is that you are incompetent. The concern is that after the first or second instance in which you lose a 5-figure sum of money for a client, you'll pack up and leave town.
I think we can agree that's a far more likely scenario than premeditated fraud.
Incidentally: $500k is the floor of the bond value needed. It scales up to $7MM with transaction volume. Personally, I think they should uncap it altogether.
