FinCEN publishes new guidance for crypto sector

Posted 10 May, 2019

The Financial Crimes Enforcement Network (FinCEN) has reportedly published its guidance in which it explains the key points that must be met to make crypto activities compliant to the Bank Secrecy Law and legal framework for money transfers.

The authority released the document on May 9. The document contains 6 sections covering main concepts, effective money transfer regulation, crypto regulation launched in 2013, while the remaining sections describe the way how crypto activities become subject to AML rules.

"This guidance does not establish any new regulatory expectations or requirements. Rather, it consolidates current FinCEN regulations, and related administrative rulings and guidance issued since 2011...," the document reads.

At the same time, FinCEN pointed out in the guidance that decentralized applications can be considered as money transfer service even despite the fact of an absence of centralized operator.

Notably, the developer and users of such applications can become subject to FinCEN's regulation.

"Once the DApp is finalized and in production, FinCEN regulations may apply to persons who use the DApp to conduct certain financial activities," as stated in the guidance.

It was also noted that decentralized trading platforms are not subject to the AML rules only if they only help to draw together buyers and sellers. At the same time,  wallets users of which are responsible for the assets for their own do not face this regulation, though the rules are effective for all services that offer safekeeping of users' private keys.

Besides, the US Securities and Exchange Commission released its own guidelines for crypto token issuing in early April.

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