On May 9, 2019, the Financial Crimes Enforcement Network (FinCEN), issued new “interpretive guidance” about how its regulations apply to businesses that conduct money transmissions in virtual currencies.In summary, a money services business (MSB) needs to register with FinCEN, (which is free and done through Form 107); get an AML compliance policy that specifies what KYC information will be collected (and aims to catch and prevent money laundering and terrorism); designate a compliance officer to monitor transactions and file suspicious activity reports for activity that looks suspicious and file currency transaction reports for transfers over $10,000; and adhere to record-keeping requirements. Crypto-to-crypto or crypto-to-fiat conversion is treated in the same way.According to the guidance, it appears the following would need to register as an MSB:Anyone exchanging or administering a token (called a convertible virtual currency, or CVC, in the guidance) who is not already regulated by the Commodity Futures Trading Commission (CFTC) or the U.S. Securities and Exchange Commission (SEC). This includesPeer-to-peer (LocalBitcoins/OTC)Custodial wallets (not your keys, not your coins)Crypto ATMsDAapsMixersCrypto payment-processorsDEX’s that don’t auto-execute and take custody in the middle of the tradeICO issuers who don’t register with the SECMining pool operators who host all the wallets on behalf of pool membersDefining Key Co...
