FinCEN Press Release About Crypto Transactions Regulation

[Ridam 7455]

Yesterday, on 18 December 2020

FinCEN(Finanacial Crime Enforcement) publishes the Notice of Proposed RuleMaking in their press release about the cryptocurrency Regualtions. It is very important updates for all the crypto ethuniasts in US and for whole world as this regulations will be used as reference for many countries affecting all the crypto community.

Currently they are expecting comments(24 Questions are there ,in which concerned parties can give feedback) about the anouncement and soon it will be implemented. Basically, they are implementing this updates for stopping the illicit activity happening with involvement of CryptoCurrency.

They had mentioned that they are positive towards the devleopment of Financial services and new innovation but in regulatory manners.

The report is very detailed and lengthy(72Pages), Let me summarise the main aspects.

What Exactly will be changes after this ?

1. Crypto Exchanges and Banks need to give a report to FinCEN about the sender information and reciever information only if the reciever is using the Non-Custodial Wallets and the amount of transation is more than 10,000$ within 24 hours. 
2. Crypto Exchanges need to keep a record of sender information and reciever information only if reciever is using Non-Custodial wallets and the amount of transation amount is more than 3,000$. 
3. All MSB(Money Service Businness) will need to go through Legal Proces and need to be registered under the certain act for working.
4. Banks and MSB need to verify the identity of Customers which are part of exchanging Crypto Curency.

• Sender Information Includes:

1. Name and Adress of Users(Verified)
2. CryptoCurrency Used and USD worth value and Time of transaction
3. Other all infomation Involved in the Transaction

• Reciever Information Includes

1. Name and Physical Address

It's quite interesting that how exchanges will know the reciver details if he/she is using Non-Custodial wallet. Maybe at the time of withdrawl to bank from Non-Custodial wallets , they will track that.(I'm not sure how this will work but this annoucement is announced already and will be implemented after further feedback).

You can go through the below reports for detailed review.

What do you think about this announcemnt from FinCEN, (FinCEN is part of US Department of Treasury)?  I am wondering how, De-Fi services will  work after all of this?

Please share your views in reply.

Related Links:

Link to this Press Release:  https://home.treasury.gov/news/press-releases/sm1216

NPRM (PDF)-https://public-inspection.federalregister.gov/2020-28437.pdf

FAQ Answered:

https://home.treasury.gov/system/files/136/2020-12-18-FAQs.pdf

 

[annayks 2314]

Very important details in this one. I read some headlines but I didn't know all this information. It seems to be one of the bad news that follow adoption, while it is probably required as a measure by powerful governments that want to have control over financial irregularities. The money laundering along with the darknet markets growth are having some of these as late reactions from governments that failed to regulate properly.

[Ridam 7455]

22 hours ago, annayks said:

. It seems to be one of the bad news that follow adoption, while it is probably required as a measure by powerful governments that want to have control over financial irregularities. The money laundering along with the darknet markets growth are having some of these as late reactions from governments that failed to regulate properly.

Well, we can't say Bad news at all. As we know US is stictly asking for kyc for all platforms working there for cryoto in past days. And it's bit more for as they add sending and keeping records for higher transation worth value. For normal customers there is no need to worry and they have clearly mentioned that, they would welcome the new advancement in Financial products.

And many bad deeds are still being performed in Darknet it will add some more security and makes them difficult and maybe many of those will be caught which is really good thing in my view. And one thing more is that , crypto taxes will be more easy for governmnet to regulate.

[Syedbesharat 5423]

This indicate the individuals will be easily find who are making hood money and fall under tax rate which they fix later but for the time they are collecting the data for implementing the new policies, these policies are good start where the common people like us have no problem because we don't do any illegal activities. This will open people mind and they will start doing KYC but this information collection gonna be hard for exchanges who will stop members funds for make them do KYC. But it's good from Ban, the U. S have taken step towards crypto legalisation and indicated they will welcome the financial innovation and want regulatory system for them. 

[Whited35 15285]

There are some specific blockchain-based DeFi platforms and DEXes. At least they can not leave the blockchain network that's why scammers are still unable to convert stolen funds into the fiat currencies to remain completely anonymous. At least sooner or later scammers fall into the trap while exchanging crypto into the fiat currencies and FinCEN is attempting to improve regulation to catch the more criminals and malicious users who attempt to store illegally earned money by converting into the crypto. 

Edited December 21, 2020 by Whited35

[Raqeebzy 6456]

If I could understand the second point so clearly, it actually means there is compulsory KYC for all banks and money business services (which includes cryptocurrency exchanges and all). Quite not comfortable with me though I think other countries will follow suits the conditions sooner or later. 

If this would solve all forms of money laundering and illicit activities in cryptocurrency and a promised user personal data safe, then all this conditions are no problem.

[Ridam 7455]

On 12/21/2020 at 12:39 PM, Whited35 said:

At least sooner or later scammers fall into the trap while exchanging crypto into the fiat currencies and FinCEN is attempting to improve regulation to catch the more criminals and malicious users who attempt to store illegally earned money by converting into the crypto. 

Exactly, it seems FinCEN is targetting at the time of exchange of crypto to fiat as obivoulsy those involved in illicit activities won't be holding in crypto, as they need fiat for further use. And I believe it will also help in tracking the money laundering happening these days.

On 12/22/2020 at 7:59 PM, Raqeebzy said:

If I could understand the second point so clearly, it actually means there is compulsory KYC for all banks and money business services (which includes cryptocurrency exchanges and all). Quite not comfortable with me though I think other countries will follow suits the conditions sooner or later. 

Yes , all MSB will need kyc of sender and adress of Receiver too if they are using the non-custodial wallet( mentioned as unhosted wallets).

It's been clearly mentioned that,  other countries will use these laws as refernce so we can say it will be followed by all other countries while regulating crypto currency.

[Whited35 15285]

7 hours ago, Ridam said:

Exactly, it seems FinCEN is targetting at the time of exchange of crypto to fiat as obivoulsy those involved in illicit activities won't be holding in crypto, as they need fiat for further use. And I believe it will also help in tracking the money laundering happening these days.

The most of the crimes are centralized to fiat currencies and the clever regulators are planning to catch any sort of crypto criminals 😂. European Union also more likely to  follow the same track unfortunately as CEX.IO is demanding further information from me to use their services. I am just tracking the updates how Chinese digital Yuan evolves and how authorities propose regulation on it !!  

[Raqeebzy 6456]

On 12/26/2020 at 5:55 AM, Ridam said:

It's been clearly mentioned that,  other countries will use these laws as refernce so we can say it will be followed by all other countries while regulating crypto currency.

We might not like it but seems like almost the best strategy against money launderers. Not expecting that any time soon in my region but I am prepared. To use and trade cryptocurrency in the next few years, this will be the prerequisites in all exchanges regulated by different laws and procedures.

[bogdanoff 3173]

I read some news that had to do with having all the big transactions to pass KYC but there will always be problems to force this. What matters now to authorities, is not the withdrawals to cash. Bitcoin is used as a currency as it is, for big transactions. This is what matters to authorities, they want to track everything big above $10,000 for now, and later it will be even above $100.