What Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies requires
The Financial Crimes Enforcement Network (FinCEN) is issuing this interpretive guidance to remind persons subject to the Bank Secrecy Act (BSA) how FinCEN regulations relating to money services businesses (MSBs) apply to certain business models involving money transmission denominated in value that substitutes for currency, specifically, convertible virtual currencies (CVCs). This guidance does not establish any new regulatory expectations or requirements; rather, it consolidates current FinCEN regulations and related administrative rulings and guidance issued since 2011, applying these rules to common business models involving CVC. The guidance clarifies that whether a person is a money transmitter is a matter of facts and circumstances, not labels. Exchangers and administrators of CVC generally qualify as money transmitters under the BSA, while users who obtain CVC to purchase goods or services on their own behalf do not. The core obligations for applicable persons include registering with FinCEN as an MSB within 180 days of engaging in money transmission and developing, implementing, and maintaining an effective written anti-money laundering (AML) program that is reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities. This program must be risk-based, approved by senior leadership, and include policies, a designated compliance officer, training, and independent review.
Pillar: Financial Crime, AML & Sanctions · Authority: The Financial Crimes Enforcement Network (FinCEN) · Version: 1.0.0 · Last updated:
Primary source: https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf
SHA-256 integrity: 266121ddd60502bc15c510f482d4ae1ad8f78b3955cfe65faa2613c8a505f66c
Primary Citations — 7 traced to source
- {"citation_id":"31_CFR_1010_100_ff_5_i_A","text":"The term 'money transmission services' is defined to mean the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means."}
- {"citation_id":"FIN_2019_G001_Section_2_1_AML_Program","text":"The BSA and its implementing regulations require MSBs to develop, implement, and maintain an effective written anti-money laundering program ('AML program') that is reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities."}
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