FinCEN, the US Financial Crimes Enforcement Network, has issued a statement with regard to digital currency.
The document was issued to an unnamed company concerned with their status as a money services business under the Bank Secrecy Act.
In this document, FinCEN makes a specific statement regarding money transmitters. The first pertains to trading platforms, including fiat-to-Bitcoin exchanges like Coinbase and crypto-to-crypto exchanges like Cryptsy.
Under this statement, these platforms would be required to obtain a licence as a money transmitting business, where before they did not.
What Does This Mean?
Under US law, money transmitting businesses must be separately licensed in each of the 50 states, which is cost-prohibitive to all but the most affluent of exchange owners.
Money transmitting businesses are also required to comply with a long list of invasive regulations from FinCEN, including anti-money laundering precautions, risk assessment, record keeping, and several others.
While the company who filed the claim went unnamed in the document, they are described as “a Platform that consists of a trading system to match offers to buy and sell convertible virtual currency for currency of legal tender, and a set of book accounts in which prospective buyers or sellers of one type of currency or the other can deposit funds to cover their exchanges.” This description could be applied to any number of Bitcoin exchanges.
If American-based Bitcoin exchanges are forced to comply with FinCEN rules, it could lead to a mass exodus of bigger players from the country to more Bitcoin-friendly jurisdictions, while the smaller players simply close up shop.
New FinCEN Statement May Force Bitcoin Exchanges Into Regulation
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