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3/19/2020

New FinCEN Guidance Affirms its Longstanding Regulatory Framework for Virtual Currencies and a New FinCEN Advisory Warns of Thr…

New FinCEN Guidance Affirms its Longstanding Regulatory
Framework for Virtual Currencies and a New FinCEN Advisory
Warns of Threats Posed by Virtual Currency Misuse
May 10, 2019

WASHINGTON—To provide regulatory certainty for businesses and individuals engaged in
expanding fields of financial activity, the Financial Crimes Enforcement Network (FinCEN) today
issued the following guidance, Application of FinCEN’s Regulations to Certain Business Models
Involving Convertible Virtual Currencies (CVC). The guidance is in response to questions raised
by financial institutions, law enforcement, and regulators concerning the regulatory treatment
of multiple variations of businesses dealing in CVCs.
FinCEN today also issued an Advisory on Illicit Activity Involving Convertible Virtual Currency
to assist financial institutions in identifying and reporting suspicious activity related to criminal
exploitation of CVCs for money laundering, sanctions evasion, and other illicit financing
purposes. The advisory highlights prominent typologies, associated “red flags,” and also
identifies information that would be most valuable to law enforcement if contained in
suspicious activity reports.
“Treasury is committed to helping financial institutions better detect and prevent bad actors
from exploiting convertible virtual currencies for money laundering, sanctions evasion, and
other illicit activities.” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and
Financial Intelligence. “The comprehensive advisory FinCEN issued today highlights the risks
associated with darknet marketplaces, peer-to-peer exchangers, unregistered money services
businesses, and CVC kiosks and identifies typologies and red flags to help the virtual currency
industry protect its businesses from exploitation.”
“FinCEN was the first financial regulator to address virtual currency and the first to assign
obligations to related businesses to guard against financial crime,” said FinCEN Director
Kenneth A. Blanco. “The money transmitter definition we published in 2011 and the guidance
we issued in 2013 clarifying how that definition applies to transactions involving virtual
currency have proven to be exceptionally durable. Our regulatory approach has been consistent
and despite dynamic waves of new financial technologies, products, and services, our original
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3/19/2020

New FinCEN Guidance Affirms its Longstanding Regulatory Framework for Virtual Currencies and a New FinCEN Advisory Warns of Thr…

concepts continue to hold true. Simply stated, those who accept and transfer value, by any
means, must comply with our regulations and the criminal misuse of any methodology remains
our fundamental concern.”
Today’s guidance does not establish any new regulatory expectations. It consolidates current
FinCEN regulations, guidance and administrative rulings that relate to money transmission
involving virtual currency, and applies the same interpretive criteria to other common business
models involving CVC. FinCEN's rules define certain businesses or individuals involved with
CVCs as money transmitters subject to the same registration requirements and a range of antimoney laundering, program, recordkeeping, and reporting responsibilities as other money
services businesses.
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The mission of the Financial Crimes Enforcement Network is to safeguard the financial system
from illicit use, combat money laundering, and promote national security through the strategic
use of financial authorities and the collection, analysis, and dissemination of financial
intelligence.

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