Titled ‘Request for Administrative Ruling on the Application of FinCEN’s Regulations to a Virtual Currency Payment System,’ the ruling is exhaustive guideline from FinCEN. Answering to the questions from the select few, the organization says that the possible status as a money services business (“MSB”) under the Bank Secrecy Act (“BSA”).
Answering to the question whether the convertible virtual currency payment system the Company intends to set up (the “System”) would make the Company a money transmitter under the BSA, FinCEN says that based on a particular activity it will determine whether it is transmitter under the BSA.
The FinCEN says the description of the System to provide payments to merchants who wish to receive customer payments in Bitcoin, if the Company sets up the System, it would be a money transmitter and should comply with all risk management, risk mitigation, recordkeeping, reporting, and transaction monitoring requirements corresponding to such status.
Guidelines Regarding Regulations on Virtual Currency Trading Platforms
Titled ‘Administrative Ruling on the Application of FinCEN’s Regulations to a Virtual Currency Trading Platform’ the organization has responded to those who wanted to know about the administrative ruling from the Financial Crimes Enforcement Network (“FinCEN”) on virtual currency trading platforms.
The FinCEN says that the Company would be a money transmitter pursuant to regulations if it wishes to set up a Platform that consists of a trading system (the “System”) to match offers to buy and sell convertible virtual currency for currency of legal tender (“real currency”), and a set of book accounts in which prospective buyers or sellers of one type of currency or the other (“Customers”) can deposit funds to cover their exchanges.
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The organization makes it clear that if the Company maintains separate accounts in U.S. dollars and a virtual wallet both segregated from the Company’s operational accounts and protected from seizure by the Company’s creditors (the “Funding Accounts”), in which Customers will deposit their U.S. dollars or convertible virtual currency to fund the exchanges.
The FinCEN also declares that if the Company maintains the funding received from each Customer in its separate book entry account (the “Customer Account”) and once the exchange is funded, the Customer will submit an order to the Company to purchase or sell the currency deposited at a given price, will fall in to the category of money services business.
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