What New FinCEN Guidance Means for US Bitcoin Companies
Faisal Khan is a payments consultant and digital money evangelist. He is the co-host of Around the Coin, a weekly podcast on banking, money and payments. He is also a frequent contributor to popular Q&A site Quora. On October 27, 2014, the Financial Crimes Enforcement Network (FinCEN) released new guidance for custodial bitcoin exchanges and payment processors, ruling that such companies may be considered money services businesses under US law. The few days since then have been very hectic. Besides fielding calls from lots of people, everyone is asking the same question. What can a bitcoin....
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The Financial Crimes Enforcement Network (FinCEN) has released new guidance for custodial bitcoin exchanges and payment processors, ruling that such companies may be considered money services businesses under US law. In a response to twin letters submitted in late 2013, the chief US money laundering and terrorist financing regulator explained that bitcoin exchanges may be money transmitters, even if they only match buyers and sellers on their platform. Further, the letters suggest this is true, even if the exchanges behave more like traditional securities or commodities exchanges, where no....
FinCEN has released two new Virtual Currency Guidance notes today. FIN-2014-R011 and FIN-2014-R2012 both detail FinCEN's response to requests "for Administrative Ruling on the Application of FinCEN's Regulations to Virtual Currency" Trading Platforms and Payment Systems. FinCEN has clarified that both would require a money transmitter license under their federal rules. FinCEN's clarifications, presented by Jamal El-Hindi, the Associate Director of FinCEN's Policy Division, may be the precursor to a new wave of Bitcoin company crackdowns. Recently, the SEC revealed that there were ongoing....
Do the FinCEN virtual currency regulations apply to Bitcoin miners in addition to exchanges? No one seems sure, but now, one consultant wants to find out. A US consulting firm has written to the Financial Crimes Enforcement Network (FinCEN) in the US, asking it to clarify its position on bitcoin mining. Atlantic City Bitcoin (ACB), registered in the state of New Jersey, has requested an administrative ruling to determine once and for all how the FinCEN rules, announced in March, apply to mining. ACB's beef concerns what it highlights as a disparity in FinCEN guidance. The guidance says: "A....
Forget price volatility and hacker attacks. The biggest threat to bitcoin's future - at least in the United States - could be the little-known Financial Crimes Enforcement Network (FinCEN). Writing in American Banker, Ecoins researcher and Bitcoin Foundation board member Jon Matonis describes how at least three US exchanges that trade bitcoins have shut down as a result of guidance recently issued by FinCEN. Citing a podcast from The Daily Bitcoin, Matonis quotes Bradley Jansen, a former assistant to Ron Paul and director of the Center for Financial Privacy and Human Rights, as saying,....
As financial service firms expand their use of the bitcoin block chain for trading and business activity, the Financial Crimes Enforcement Network (FinCEN) isn't missing a beat. FinCEN, an enforcement arm of the U. S. Department of Treasury, has ruled that companies using the bitcoin block chain to transfer precious metals are considered money transmitters and therefore subject to anti-money laundering restrictions. The ruling came in response to a letter from an unnamed company seeking clarification on this point. FinCEN posted the ruling on its website to serve as guidance to financial....