On October 27, 2014, the Financial Crimes Enforcement Network (“FinCEN”) issued two administrative rulings regarding virtual currency. The first administrative ruling concerns a proposed virtual currency trading and booking platform, and the second administrative ruling concerns a proposed virtual currency payment system. In both cases, FinCEN determined that the proposed activities would be considered money transmission and, thus, the companies involved (each, “company”) would be viewed as money transmitters under the Bank Secrecy Act (“BSA”).
VIRTUAL CURRENCY TRADING PLATFORM -
The proposal considered in the first administrative ruling involves a virtual currency trading and booking platform (“Platform”) that matches offers to buy and sell virtual currency for real currency. If a match is found between a buy and sell order, the Platform will use previously deposited customer funds held in a customer account to purchase the currency from the seller. If a match is not found, the customer may elect to withdraw funds from the customer account or keep them on deposit for future orders. Payments to or from customer accounts would be sent and received through the Automatic Clearinghouse (“ACH”) system or by wire transfers from U.S. banks.
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