How does that square with the legalities?
It doesn't.
Here is a the reality (and it applies to just about any legal matter). It isn't worth 2 craps what you think ... or I think or your neighbor thinks or even your lawyer thinks. What matters is what that old guy in a robe behind a bench thinks.
At least in the US FinCEN has already told you what their side of the case will look like. If you convince a judge they are wrong and you are right well it doesn't really matter what FinCEN thinks either.
However if that is the extent of your case well I don't think FinCEN has much to worry about.
