The Economic Crimes Enforcement Network (FinCEN) has sent out warning letters to bitcoin-connected firms notifying them that they need to comply with federal funds transmission laws, according to reports.
FinCEN, a unit of the US Treasury Department, has sent out “industry outreach” letters regarding anti-income laundering practices. About a dozen letters have been delivered to bitcoin businesses so far.
Back in November, Jennifer Shasky Calvery, the head of FinCEN, suggested at a Senate hearing that virtual currency exchanges and administrators need to do 3 factors: register with FinCEN, put in location anti-income laundering procedures and preserve their records.
Mike Caldwell, the proprietor of Casascius Coins, minted physical units of bitcoin with private keys embedded inside. He received a letter from FinCEN, and subsequently posted this notice on his site:
“I have suspended accepting new orders, pending resolution of some issues I have as to regulatory problems.”
The letter Caldwell received indicated that his enterprise was regarded as a money transmitter organization.
The Verge reported that only 35 bitcoin-connected organizations have registered with FinCEN as cash transmitter companies. It’s clear from these letters that FinCEN believes more businesses need to have to file paperwork in order to be compliant.
Perhaps the most noteworthy bitcoin organization to fall foul of US law has been the Japan-based exchange Mt. Gox. The organization had $ two.9m seized when it failed to inform its US bank that it was in the organization of transmitting funds.
Government regulators have been interested in finding out a lot more about virtual currencies. With the exception of Mt. Gox and funds laundering enterprise Liberty Reserve, regulators have merely been on a mission to gather info.
State regulation
In August, the New York Division of Economic Solutions (DFS) issued 22 subpoenas to bitcoin companies as it attempted to realize what type of policy to enact in the state where US monetary activities are headquartered.
The DFS has also deemed issuing so-named “BitLicenses” to virtual currency companies.
48 US states at the moment call for funds transmission organizations to register with a regional regulatory commission, South Carolina and New Mexico are the only two exceptions.
A number of nations have made statements relating to bitcoin policy inside their jurisdiction recently.
The Chinese government has just placed restrictions on bitcoin as a method of payment, causing the price tag of the currency to spiral downward.
In contrast, Denmark’s economic authority has stated that cryptocurrencies are not topic to monetary regulation there. Additionally, Norway’s director basic of taxation has mentioned that bitcoins “don’t fall beneath the usual definition of money or currency,” which makes for an intriguing tax predicament within the scandinavian nation.
Via Reuters
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FinCEN Sends Warning Letters to Unregistered Bitcoin Firms
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