1. Feds Use Broad Definition of “Virtual Currency” in Anti-Money Laundering Rules

    A lot of companies do business in what might be called “virtual currency,” writes David Beam of law firm K&L Gates. But they might not know that they are subject to anti-money laundering laws. And that could spell trouble:

    “Most of these companies probably do not consider themselves financial institutions. Many have never considered the possibility that they need to register with the Financial Crimes Enforcement Network (‘FinCEN’), an agency in the U.S. Treasury. And probably only a few have considered the possibility that they should be reporting suspicious virtual currency transactions to the authorities. Some of these companies might need to rethink their assumptions in light of a guidance document recently issued by FinCEN… 

    The Guidance addresses the application of FinCEN rules to parties involved with ‘convertible’ virtual currency systems. The Guidance defines convertible virtual currency as virtual currency that ‘either has an equivalent value in real currency, or acts as a substitute for real currency.’ The Guidance defines virtual currency as ‘a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction.’” 

    Read the full update, Virtual Currency Under Federal Anti-Money Laundering Laws: FinCEN Provides Guidance - K&L Gates LLP»

Notes

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