News & Analysis as of September 20, 2024

Money Transmitter

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Virtual Currency (aka Digital Currency or Digital Money) is a type of currency or medium of exchange that is not issued by any government nor guaranteed by a government currency. Despite lacking legal tender status, Virtual Currency is still traded and exchanged in some environments, typically online environments or communities. Bitcoin is the most well-known form of Virtual Currency. less -

Pending Changes to Anti-Money Laundering Program Requirements for MSBs and Other Financial Institutions

Wilson Sonsini Goodrich & Rosati on 8/20/2024

Money services businesses (MSBs), a category which includes money transmitters (e.g., PayPal and other payment facilitators), as well as administrators and exchangers of convertible virtual currencies (e.g., Bitcoin...more

PA Department of Banking and Securities: Virtual Currency is “Money”

Ballard Spahr LLP on 5/14/2024

On April 20, 2024, the Pennsylvania Department of Banking and Securities (“DoBS”) issued a policy statement (“Policy Statement”) to “clarify” that the Department’s interpretation of the term “money” in the Pennsylvania Money...more

FTX collapse suggests money transmitters focus on permissible investments

McGlinchey Stafford on 11/18/2022

The collapse of cryptocurrency exchange FTX has been widely reported across the world. One interesting exception to the fallout appears to involve U.S. customers, according to a tweet from FTX’s former CEO. We’ve received...more

FinCEN and Federal Reserve Propose To Significantly Lower Threshold for International Funds Transfers Under Recordkeeping and...

Skadden, Arps, Slate, Meagher & Flom LLP on 11/11/2020

On October 27, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Board of Governors of the Federal Reserve System (Federal Reserve, together with FinCEN, “the Agencies”)...more

Superman29 - Welcome to the Phantom Zone

Polsinelli on 8/10/2020

In a lesson to everyone that the use of foolish monikers will come back to haunt you, Kais Mohammad, 36, a.k.a. “Superman29,” has met his Kryptonite - the U.S. Department of Justice. ...more

U.S. man charged with operating darknet-based bitcoin 'mixer' that laundered $300 million

Hogan Lovells on 2/18/2020

The U.S. Department of Justice (DoJ) has indicted a man from Ohio for running Helix, a darknet-based cryptocurrency laundering service that is alleged to have laundered bitcoins worth $300 million....more

FinCEN Deputy Director Stresses Technological Innovation, Virtual Currency Enforcement and the U.S. Culture of Compliance

Ballard Spahr LLP on 9/20/2019

Last Wednesday, FinCEN Deputy Director Jamal El-Hindi appeared at the annual conference of the Money Transmitter Regulators Association and delivered prepared remarks. The topics of his address covered three issues of...more

If you Exchange Virtual Currency, you are a Money Transmitter and must comply with the Bank Secrecy Act (BSA)

Foodman CPAs & Advisors on 7/22/2019

FinCEN defines a Money Service Business (MSB) as any person DOING BUSINESS, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities...more

Application of FinCEN’s regulations to certain business models involving convertible virtual currencies

Eversheds Sutherland (US) LLP on 5/21/2019

On May 9, 2019, the Financial Crimes Enforcement Network (FinCEN) issued interpretive guidance1 summarizing the application of the Bank Secrecy Act (BSA) rules to business models “involving money transmission denominated in...more

FinCEN – We Will Identify Where Compliance Is Not Taking Place And Take Appropriate Action

Sheppard Mullin Richter & Hampton LLP on 5/15/2019

Last week we reported that FinCEN had issued new guidance addressing cryptocurrency and other convertible virtual currency. The need for compliance was reinforced this week. In a speech by Sigal Mandelker, Under Secretary for...more

FinCEN Shows a Little Bite to Go with Its Bark

Orrick - On the Chain on 4/25/2019

Last week, the Financial Crimes Enforcement Network (FinCEN) backed up its strong public statements about enforcing the anti-money laundering (AML) laws with respect to cryptocurrency by bringing an enforcement action against...more

State Regulations on Virtual Currency and Blockchain Technologies - (Updated)

Carlton Fields on 4/24/2019

There exists no uniformity with respect to how businesses that deal in virtual currencies (also known as "cryptocurrencies") such as Bitcoin are treated among the states. For these proprietors, often the first question asked...more

PA Department of Banking and Securities: Virtual Currency is not “Money”

Ballard Spahr LLP on 1/25/2019

Typical Virtual Currency Exchanges Do Not Require PA Money Transmitter Licenses - The Pennsylvania Department of Banking and Securities (“DoBS”) just released Guidance declaring that virtual currency, “including Bitcoin,”...more

Should You Bank a Virtual Currency Business?

Ward and Smith, P.A. on 9/28/2018

Virtual currencies like Bitcoin and Ethereum have spawned many types of businesses that need banking services. Many banks "de-risk" -- do not provide banking services -- to these businesses. Many virtual currency...more

FinCEN Director’s Speech Underscores the Need for Virtual Currency Businesses to Comply with the Bank Secrecy Act

Blank Rome LLP on 8/30/2018

Individuals and businesses that accept and transmit virtual currency must register with the Financial Crimes Enforcement Network (“FinCEN”) as a money service business (“MSB”). Registrants must develop and maintain an...more

Unlicensed Bit Coin Exchange Operator Sentenced to One Year and a Day for Attempted Money Laundering in Undercover Sting Operation...

Ballard Spahr LLP on 7/24/2018

Earlier this month, the District Court for the Central District of California imposed a prison sentence of one year and a day, with three years of supervised release, on defendant Theresa Lynn Tetley, who had pleaded guilty...more

Anti-Money Laundering Obligations for Virtual Currency Companies

Wilson Sonsini Goodrich & Rosati on 4/4/2018

Virtual currency businesses are under scrutiny by U.S. anti-money laundering (AML) regulators. Earlier this year, U.S Treasury Secretary Steven Mnuchin emphasized that virtual currencies are subject to AML regulations. He...more

FinTech Flash: So You Want to Put a Bitcoin ATM in a Coffee Shop?

Goodwin on 3/28/2018

This writer received three cold emails in two weeks asking for legal help around operating a Bitcoin ATM (BTM). Each groundbreaker asked: “What are the legal requirements for an operator putting a BTM in, say, a coffee shop?”...more

FinCEN Is Watching ICOs for BSA Violations

Perkins Coie on 3/14/2018

In a recently published letter to the Senate Finance Committee, FinCEN confirmed that when an ICO token is a “convertible virtual currency,” administrators or exchangers of the token would be “money transmitters” under...more

FinCEN Letter to U.S. Senate Committee on Finance Purports to Thread Needle of Potentially Competing Jurisdictions by Regulators...

Ballard Spahr LLP on 3/9/2018

As we previously have blogged, the Financial Crimes Enforcement Network (“FinCEN”) became one of the first regulators to wade into the regulation of cryptocurrency when it released interpretive guidance in March 2013 stating...more

Florida Lawmakers Seek to Bring Virtual Currency into the Fold

Ballard Spahr LLP on 4/26/2017

On Monday, the state of Florida moved a step closer towards amending its money laundering statute to include the nefarious use of bitcoin and other virtual currencies. The bill, H.B. 1379, has sailed through a committee vote...more

Is Your Data Ready to Move to a Uniform Report Submission? NMLS MSB Call Report Adopted for 22 Licenses as of January 1st

Bradley Arant Boult Cummings LLP on 12/16/2016

Seventeen state agencies, affecting 22 license types, have currently committed to adopt the NMLS MSB Call report for Q1 2017 reporting. The NMLS MSB Call Report applies to licensees who conduct the following activities: money...more

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