TL;DR: Three of the world’s most powerful regulators, Big Brothers comprised of the U.S. Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the U.S. Securities and Exchange Commission (SEC), issued a new joint statement, warning about the illicit use of cryptocurrencies.
Big Brothers Take Aim at Crypto
It’s not often the CFTC, FinCEN, and SEC collaborate for public relations, but when they do folks tend to perk up. Today, all three issued a warning statement “to remind persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations under the Bank Secrecy Act (BSA).”
With the entrance of legacy-bankrolled, federally-regulated exchanges such as Bakkt entering the ecosystem, along with Cboe and CME, BitLicenses becoming more common, and the legacy financial media taking ever-greater notice of crypto markets and general doings within the space, it appears the Big Brothers are keen to make sure everyone understands exactly who is in charge and what the rules are.
“AML/CFT obligations apply to entities that the BSA defines as ‘financial institutions,'” the statement continued, “such as futures commission merchants and introducing brokers obligated to register with the CFTC, money services businesses (MSBs) as defined by FinCEN, and broker-dealers and mutual funds obligated to register with the SEC. Among those AML/CFT obligations are the requirement to establish and implement an effective anti-money laundering program (AML Program) and recordkeeping and reporting requirements, including suspicious activity reporting (SAR) requirements.”
Indictments, Lawsuits Commonplace
Indeed, indictments and class action lawsuits are now commonplace in cryptocurrency, and might be slowly overtaking talk about innovation and advancement. In the crypto news business, for example, we cannot go a day without reporting on Facebook Coin Libra and its woes. Hardly a week goes by without another arrest, settlement, or rumored investigation. Some enthusiasts welcome regulators’ involvement, having openly scolded agencies for waiting too long. Others see it as stifling encroachment, a way for governments to flex their muscle and seem relevant.
After a somewhat tortured batch of word gymnastics about what is a “digital asset” and what is an “exchange,” the statement goes on to insist “regardless of the label or terminology that market participants may use, or the level or type of technology employed, it is the facts and circumstances underlying an asset, activity or service, including its economic reality and use (whether intended or organically developed or repurposed), that determines the general categorization of an asset, the specific regulatory treatment of the activity involving the asset, and whether the persons involved are ‘financial institutions’ for purposes of the BSA.”
The joint statement ultimately ends in that manner after ever-more abbreviations and stipulations and lawyerly dross, almost doing more harm than good for those wishing to comply. It’s safe to write folks dabbling in any kind of business concerning cryptocurrency in the United States, it behooves them to seek out either attorneys or to get right with the Big Brothers themselves directly. Not doing so could mean both financial disaster and sure incarceration.
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DYOR: CoinSpice is your home for just spicy crypto things. We’re not affiliated with any cryptocurrency project or token. Each published piece is intended for information purposes only, not investment advice and not in the hope of impacting speculative markets. There are plenty of trading sites and coin-specific advocacy journals out there, we’re neither. CoinSpice strives for rigorous accuracy in our reporting. Information presented here is contingent usually on a host of factors, and the ecosystem moves fast — prices change, projects change, and at warp speed. Do your own research.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.