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FinCEN proposes closing AML gaps for convertible virtual currency, digital asset transactions
The Financial Crimes Enforcement Network (FinCEN) Friday issued a proposed rule aimed to close anti-money laundering (AML) regulatory gaps for certain convertible virtual currency (CVC) and digital asset transactions. The proposal would require banks and money services businesses (MSBs) to submit reports of transactions involving CVC and digital assets with legal tender status (LTDA) over $10,000.
In addition, the proposal would require banks and MSBs to keep records of a customer’s CVC/LTDA transactions and counterparties – including verifying the identity of their customers – if a counterparty uses an un-hosted or otherwise covered wallet and the transaction is greater than $3,000. A wallet hosted in a jurisdiction identified by FinCEN would also fall under this proposal.
“This rule addresses substantial national security concerns in the CVC market, and aims to close the gaps that malign actors seek to exploit in the recordkeeping and reporting regime,” said Treasury Secretary Steven Mnuchin in a release. “The rule, which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement, and increase transparency while minimizing impact on responsible innovation.”
The proposal comes as a result of the FinCEN Exchange meetings in 2020 and 2019 geared toward cryptocurrency. Comments are due to FinCEN Jan. 4; view the full release here.
NAFCU recently shared support for defining an overall “effective and reasonably” designed AML program in a letter sent in response to FinCEN’s proposed rulemaking gathering feedback on potential improvements to AML programs.
The association will continue to analyze the proposal and work closely with FinCEN to ensure credit unions are aware of regulatory changes and trends.