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FinCEN Extends Comment Period for Closing AML Regulatory Gaps for Digital Asset Transactions

FinCEN | Release | Jan 14, 2021

hourglass time - FinCEN Extends Comment Period for Closing AML Regulatory Gaps for Digital Asset TransactionsWASHINGTON—The Financial Crimes Enforcement Network (FinCEN) announced today it is reopening the comment period for its recent proposed rulemaking regarding certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA).

Under the Notice of Proposed Rulemaking (NPRM), banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.

See:  Hester Peirce Says SEC Enforcement is Not the Way to Provide Crypto Clarity

Today’s Notice identifies additional statutory authority for the proposed rule under the Anti-Money Laundering Act of 2020, provides additional information regarding the reporting form, and reopens the comment period for the proposal.

Specifically, FinCEN is providing an additional 15 days for comments on the proposed reporting requirements regarding information on CVC or LTDA transactions greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in jurisdictions identified by FinCEN.

FinCEN is providing an additional 45 days for comments on the proposed requirements that banks and MSBs report certain information regarding counterparties to transactions by their hosted wallet customers, and on the proposed recordkeeping requirements.

FinCEN appreciates the robust responses already provided by commenters and has reviewed more than 7,500 comments submitted during the NPRM’s original comment period.  FinCEN looks forward to reviewing any additional information submitted during the extended comment period, and to continuing its active engagement with the cryptocurrency industry to ensure innovation with integrity that appropriately addresses anti-money laundering and national security risks.

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Why it matters

The shorter extension for comments on the $10,000 threshold may indicate that FinCEN is likely to pass this aspect of the rule change but is still open to modifying aspects of the remaining record keeping requirements.

View release:  here

 


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