Category: Regulation
FinCEN rules also cover some foreign Bitcoin exchanges
26th March
As a continuation of my coverage of the new FinCEN guidelines for Bitcoin businesses I wanted to cover how it affects non US businesses.
If your Bitcoin exchange busines is based outside the US, you may be thinking hah those damn gringos and their silly rules. You don’t need to worry about it right? You would think so, however FinCEN states in Foreign-Located Money Services Businesses.:
An entity may now qualify as a money services business (MSB) under the Bank Secrecy Act (BSA) regulations based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States. The Final Rule arose in part from the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States …
What the FinCEN Bitcoin guidelines actually say
22nd March
On March 18th this year (2013) the closest thing we have in the US to a Federal payments regulator FinCEN (Financial Crimes Enforcement Network) issued new Guidelines for Virtual Currencies.
What is FinCEN
There are a lot of misunderstandings in the reporting of these rules. FinCEN‘s job is to:
FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
Thus they are not a banking regulator. This is neither the FDIC or the Federal Reserve. This isn’t the Secret Service either whos job it is to “to safeguard the nation’s financial infrastructure and payment systems to preserve the integrity of the economy”.
FinCEN isn’t there to protect consumers either. FinCEN’s only job is to enforce the BSA which funnily …
BitInstant is first US bitcoin exchange to be federally licensed
19th April
Casascius pointed out on BitCoin Talk yesterday that BitInstant the BitCoin exchanger has received a Money Service Business (MSB) license from the US Financial Crime Regulator FinCEN. Here is the official letter from FinCEN
This is quite big news as it is yet another step in legitimizing it. From what I understand most European regulators have decided they don’t need Bitcoin exchangers to be licensed (see yesterdays story about Denmark).
Personally I don’t think they need to be regulated, but in the US this I believe will help remove some of the reluctance businesses have had to adopt BitCoin. They still have to battle their book keepers to move away from checks but this might help them to persuade their legal counsel to allow them to start experimenting.
BitInstant
BitInstant provides good old fashioned own account exchange services between a series of BitCoin market …
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