News & Analysis as of November 15, 2024

Money Services Business

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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

How Will Virtual Currency Be Taxed?

Foodman CPAs & Advisors on 11/17/2021

Despite the confusing interpretations by US regulators, non-compliance with crypto tax rules can cost taxpayers dearly. Unfortunately, the answer to “how is virtual currency taxed” depends on who you ask....more

FinCEN Looks to Rein In Cryptocurrency Transactions

Latham & Watkins LLP on 1/15/2021

A new proposal would subject financial institutions and exchanges to onerous recordkeeping and reporting requirements for certain digital currency transactions. In a surprise release in the waning days of the Trump...more

FinCEN’s Proposed Rulemaking for Cryptocurrency – The Balance of National Security vs. Privacy

Rothwell, Figg, Ernst & Manbeck, P.C. on 1/6/2021

Just before the Christmas holidays, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued proposed rulemaking entitled “Requirements for Certain Transactions Involving Convertible Virtual...more

FinCEN Takes Action Against Bitcoin Mixer for Violating the Bank Secrecy Act

Foley & Lardner LLP on 10/27/2020

On October 19, 2020, The Financial Crimes Enforcement Network (FinCEN) announced its first action against a bitcoin mixer: a $60 million civil penalty against Larry Dean Harmon. Harmon was the founder and operator of Helix...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

FinCEN Sends Message to the Virtual Currency Industry: The Travel Rule Applies to You, Too

Orrick - On the Chain on 5/28/2020

FinCEN Director Ken Blanco addressed this year’s Consensus Blockchain Conference on May 13, 2020. In a set of prepared remarks, Blanco recognized the unprecedented challenges that the COVID-19 pandemic has created for...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

IRS Hints at Form 8938 Requirements for Reporting Crypto Assets Held at a Foreign Exchange

Orrick - On the Chain on 1/8/2020

With the emergence of digital assets, the question has arisen whether digital assets held in “wallets” in foreign exchanges need to be reported on Internal Revenue Service (IRS) Form 8938, Statement of Specified Foreign...more

In Case You Needed A Reminder – AML/CFT Regulations Apply to Transactions in Cryptocurrencies

Orrick - On the Chain on 11/6/2019

Earlier this month, the leaders of the U.S. Commodity Futures Trading Commission, the Financial Crimes Enforcement Network, and the U.S. Securities and Exchange Commission released a joint statement reminding individuals...more

Blockchain Week in Review - October 2019

Perkins Coie on 10/18/2019

U.S. Developments - U.S. Federal Regulatory Developments - CFTC, FinCEN, and SEC Leaders Release a Join Statement on Digital Assets - On October 11, 2019, the heads of the Commodity Futures Trading Commission (“CFTC”),...more

Fake It Till You Make It: The Travel Rule And Virtual Currencies

King & Spalding on 10/2/2019

The Travel Rule is an old friend for those familiar with banking regulations and anti-money laundering rules. The Rule, first issued by FinCEN in 1995 with fiat currency in mind, requires banks and nonbank financial...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

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

FinCEN Announces First-Ever Enforcement Action Against Bitcoin Trader For Violations Of BSA

Fox Rothschild LLP on 4/24/2019

Last week, the Financial Crimes Enforcement Network (FinCEN) announced its first-ever civil penalty against a cryptocurrency exchanger for willful violations of the Bank Secrecy Act (BSA). According to the FinCEN Assessment...more

Spectacular Failure of Canadian Cryptocurrency Exchange Provides $190 Million Lesson on the Need for Digital Asset Compliance...

Polsinelli on 2/7/2019

QuadrigaCX, one of the largest Canadian cryptocurrency exchanges, recently left users in the lurch when it took its website offline and filed for creditor protection in Nova Scotia. ...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

¿Vale la pena el riesgo de la Moneda Virtual?

Foodman CPAs & Advisors on 11/5/2018

Hemos leído que la Moneda Virtual (MV) es un "activo especulativo" que, en determinadas circunstancias, puede utilizarse para pagar bienes o servicios o ser retenido para inversiones; y que su intercambio o uso de intercambio...more

Is Virtual Currency worth the Risk?

Foodman CPAs & Advisors on 11/5/2018

We have read that Virtual Currency (VC) is a “speculative asset” that under certain circumstances may be used to pay for goods or services or be held for investment; and that its sale, exchange or use has tax consequences...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

A Big Week on the Blockchain: Recent Enforcement and Regulatory Developments

Orrick, Herrington & Sutcliffe LLP on 9/19/2018

Technology evolves and events unfold at a dizzying pace in the blockchain world, but even by those standards this past week was tough to keep up with. Every day seemed to bring a new first for the industry...more

FinCEN Director Addresses Virtual Currency and Touts Regulatory Leadership and Value of SAR Filings

Ballard Spahr LLP on 8/13/2018

Address Emphasizes Role of SARs in Fighting Illegal Activity, Including Drug Dealing Fueling the Opioid Crisis - Kenneth Blanco, the Director of the Financial Crimes Enforcement Network (“FinCEN”), discussed last week...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

¿Quién monitorea los “wallets” de las Monedas Virtuales?

Foodman CPAs & Advisors on 7/13/2018

Los inversionistas de la Moneda Virtual (MV) utilizan los servicios de plataformas en línea "seguros" para comprar, vender, transferir y almacenar la MV. Los proveedores de estos servicios se conocen como “wallets,...more

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