Category Archives: Financial Crimes Enforcement Network

Auto Added by WPeMatico

FinCEN Fines First-Ever Bitcoin Trader under AML Laws

FinCEN Fines First-Ever Bitcoin Trader under AML Laws

The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has penalized what it terms a “peer-to-peer cryptocurrency exchanger” in a historic case of Anti-Money Laundering (AML) violation by a Bitcoin trader.

California resident and Bitcoin seller/buyer Eric Powers was adjudged to have failed to comply with the Bank Secrecy Act (BSA) registration and requirements during a two-year period  between 2012 and 2014. Powers has been fined USD 35,000 and is barred from providing money transmission services.

FinCEN asserts that Powers had sold and bought Bitcoins over the internet without registering himself as a money transmitter or money service enterprise. Additionally, he had not reported suspicious crypto and fiat transactions, with the enforcement body citing 160 Bitcoin transactions worth USD 5 million as well as 200 transactions involving some USD 10,000 in physical currency transfer; all without any currency transaction report.

The trader was also accused of processing suspicious transactions without filing reports, including for darknet marketplace business transactions on Silk Road. Powers has admitted to the violations.

FinCEN director, Kenneth A Blanco, said:

“Obligations under the BSA apply to money transmitters regardless of their size… [Powers] specifically was aware of these obligations, but willfully failed to honor them… Such failures put our financial system and national security at risk and jeopardize the safety and well-being of our people, as well as undercut responsible innovation in the financial services space.”

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post FinCEN Fines First-Ever Bitcoin Trader under AML Laws appeared first on BitcoinNews.com.

Law Professor’s Paper Targets US Regulatory Confusion over Crypto

Law Professor's Paper Targets US Regulatory Confusion over Crypto

A professor from the University of Arkansas School of Law has written a paper essentially claiming that US regulators are in a state of confusion over exactly what cryptocurrency is.

The article, entitled ‘U.S. Law: Crypto is Money, Property, a Commodity, and a Security, all at the Same Time’, written by professor Carol Goforth for the Journal of Financial Transformation, has recently been published in the University of Oxford’s Business Law blog.

The article is raising eyebrows as it outlines what many some academics and lawmakers are already thinking across the US, that the SEC really doesn’t know how to proceed over cryptocurrency legislation as the commission can’t really classify it.

Goforth claims that part of the problem which prevents correct legislation is the fact that a broad definition does not cover the requirements of the four entities in US government currently dealing with cryptocurrency. The Internal Revenue Service (IRS) defines cryptocurrency assets as property, the Department of Treasury through its Financial Crimes Enforcement Network (FinCEN) “very much like money”, the Commodity Futures Trading Commission (CFTC) as commodities, while the Securities and Exchange Commission (SEC) lumps cryptocurrency assets into its “securities” basket.

Here lies the problem claims Goforth; this diverse set of contradictory definitions make a broader definition impossible, in fact as she points out cryptocurrencies also have other functions not even covered by these four definitions.

Putting aside these four bodies, jurisdictions of individual US states are also bringing in their own guidelines regarding virtual assets, adding even more uncertainty to an already confused area, claims Goforth. Registering an exchange in New York, for example, will require a different process for completing the same activity in, for example, California.

The professor explains that in view of such a diversity of cryptocurrency functions a monolithic approach to defining and therefore regulating virtual currency should be abandoned to make way for far more nuanced thinking by government agencies; an approach which examines the functionality of the crypto asset along with the requirements of the agency issuing guidelines for its use.

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post Law Professor’s Paper Targets US Regulatory Confusion over Crypto appeared first on BitcoinNews.com.

US Financial Crimes Agency Condemns Iran for Use of Crypto to Avoid Sanctions

A US financial crimes regulator has condemned the use of cryptocurrencies by Iran as a way of bypassing economic sanctions, encouraging institutions and US-based exchanges to avoid dealing with the nation.

The Financial Crimes Enforcement Network (FinCEN) has urged domestic cryptocurrency exchanges to be aware of Iranians using cryptocurrencies, including Bitcoin, to circumvent US economic sanctions against the country.

FinCEN’s advisory report published Friday estimates that since 2013, Iran has hosted USD 3.8 million in Bitcoin transactions, with this coming in domestic peer-to-peer (P2P) and exchange transactions alongside third-party countries such as the US. The report advises institutions to use the technology available to monitor open blockchains and investigate ledgers to see if any transactions originate or terminate in Iran.

Despite the relatively low levels of cryptocurrency adoption in the middle eastern nation, Iran’s utilization of cryptocurrency is described as “illicit and malign” in its attempts to ”exploit” the financial system and provide a method of avoiding sanctions.

US-based exchanges were warned of their obligations under the Bank Secrecy Act that require ”appropriate systems” for preventing the facilitation of transactions that may oppose sanction requirements.

Sanctions against Iran were reinstated under President Donald Trump earlier this year when he withdrew the US from the Iran nuclear deal.

Last month, Bitcoin News caught up with IranbyBit, a travel startup that offers its services in Bitcoin, indeed as a way to avoid financial restrictions.

As founder Setare Shabanipour sees it, the more foreigners visit the country, the more likely it is that cynical perceptions of the country will dissipate: ”They can decide for themselves about the country and this can lead to a change of attitude toward Iranians in global communities and markets.”

While US sanctions against Iran are an attempt to target the government in a negative capacity, it cannot be helped that they also harm the whole economy and individual people themselves. Both asset freezes and trade embargoes have taken a serious toll on the Iranian economy and the people.

Shabanipour believes that by promoting Iran as a travel destination, she can help provide part of a solution: “It is inevitable that cultural bridges will form among foreign and local cultures. Such a flourishing market will result in attracting investment and building up more tourism infrastructures in Iran.”

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post US Financial Crimes Agency Condemns Iran for Use of Crypto to Avoid Sanctions appeared first on BitcoinNews.com.