The operations of all stablecoins has been viewed as falling under their remit to protect “money transmission services“, by the United States Financial Crimes Enforcement Network ( FinCEN).A statement by Director Kenneth Blanco.
From the view of FinCEN technological neutral standpoint, “It does not matter if the model of stablecoin whether backed by a currency, a commodity, or even an algorithm – the rules are the same,” Blanco stated this reason during his speech on Friday, in the Chainalysis Links conference in New York City.
With Blanco’s insistence that stablecoin administrators must register as a Money Services Business (MSB) with FinCEN now came about the clarification on the issue by the American’s anti-money laundering regulator.
With the technology neutral standpoint of FinCEN which stablecoins is seen in that definition, views stablecoin as money transmitters, and their administrators as MSBs, which then come to the point that firms dealing with them must follow federal know-your-customer (KYC) and AML laws under the Bank Secrecy Act.
Therefore, a branch of the Treasury Department, FinCEN investigates money laundering and other financial crimes by going through transaction records and data to help with investigations.
Ultimately,” it is not what you name it that matters but the actual core activities of the firm that counts” therefore, FinCEN applies the same technology neutral regulatory framework to attend to any activity that provides the same purpose at the same level or risk, regardless of its label.
Most Of Blanco’s comments and statements brought some legal clarity especially on crypto notable and popular named Like Facebook Libra.
According to Blanco, he said FinCEN had begun the study of stablecoins in crypto’s early days and first issued guidance on it in 2008. He said that increasing public interest warranted clarification. Therefore stablecoin concept is not even a new thing.
In the past, money transmission service considerations was placed on ICO issuers by FinCEN decision and not long on some decentralized applications.
The Friday conference was to reemphasized on the regulations. There’s no excuse for non-compliance as non compliance is not allowed. Not in money transmission or in the requirements of Financial Action Task Force’s Travel Rule.
“We can’t change the requirements for the firm rather the firm need to structure to meet the regulations,” Blanco stated.
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Credit: Daniel NelsonJOIN OUR COMMUNITY