FinCEN releases new guidance document for crypto-entities and activities
In a recent development, the Financial Crimes Enforcement Network [FinCEN] published a thirty-page document guiding financial institutions to comply with current regulations while interacting with digital assets, and further analyzed activities and entities that come under their jurisdiction.
The latest “interpretive guidance” released by FinCEN noted that the guidance did not entail any new regulatory establishment. Instead, it “consolidates” existing FinCEN regulations and administrative rulings issued in 2011.
The guidance document stated that current and emerging business models, specifically involving money transmission in “convertible virtual currencies” or CVCs, would fall under the current obligations of the Bank Secrecy Act [BSA].
The overall guidance is structured in six sections. Section 1 to 5 entails key concepts, consolidation and summarizing the existing FinCEN regulations under BSA involving money transmission involving CVC activities, a summary of development and content of FinCEN’s 2013 guidance and regulatory approach. Section 6 lists all the resources for the purpose of further explanation covered in the guidance.
Software or non-custodial wallet providers and multi-sig providers without the ability to transact are not regulated as money transmitters.
The comprehensive document also highlighted decentralized applications or DApps in the same section, stating,
“The same regulatory interpretation that applies to mechanical agencies such as CVC kiosks applies to DApps that accept and transmit value, regardless of whether they operate for profit. Accordingly, when DApps perform money transmission, the definition of money transmitter will apply to the DApp, the owners/operators of the DApp, or both.”
Drawing a significant difference, FinCEN further noted that DApp developers did not qualify under the money transmitter definition only for creating the DApp. They will qualify as money transmitters under the BSA only when the DApp created is put to actual use for the purpose of money transmission.
The FinCEN document is similar to the recent framework published by the US Securities and Exchange Commission on the regulations applicable while engaging in the offer, sale, or distribution of digital assets.
The co-founder of @bloxrouteLabs, Emin Gun Sirer, tweeted,
“It is remarkable what the document does not do: it does not ban the tech. It does not ban any aspect of the technology that actually makes FINCEN’s job harder. It leaves anonymity providers exempt, for instance.”
The post FinCEN releases new guidance document for crypto-entities and activities appeared first on AMBCrypto.
Be sure not to miss any important news related to Cryptocurrencies! Follow our news feed in the way you prefer; through Twitter, Facebook, Telegram, RSS or email (scroll down to the bottom of this page to subscribe). Bitcoin never sleeps. Neither do we .
Síguenos en Telegram