Topic: Bitcoin Targeted By Latest FinCEN Ruling? – Implications Are Profound - page 3. (Read 5142 times)

here is the relevant part:

"Consistent with the standard for reporting suspicious activity under the BSA, if a financial institution knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution involves funds derived from illegal activity or appears to be indicative of money laundering, terrorist financing, or other violation of law or regulation, the financial institution should file a suspicious activity report (SAR).8 As noted in the Joint Guidance, financial institutions that provide banking services to MSBs should file a SAR if they become aware that their customers are operating as unregistered or unlicensed MSBs.9"

as long as mtgox makes every reasonable effort to ensure he is not dealing with people engaged in these activities i fail to see how they can be accused of any wrongdoing.  every other bank in the world that services US citizens has the same regulation hanging over its head.

i fail to understand why all the crackheads made a big fuss about how Bitcoin would be the currency of the drug dealers last year.  i, for one, don't think Silk Road had anything to do with last Springs rally.  i just think it was a good idea whose time had come.  its time to disentangle that myth from Bitcoin.

The Long Arm Of Uncle Sam Just Got Longer

This one’s hot off the presses. Just yesterday, our friends at the Financial Crimes Enforcement Network (FinCEN) issued a press release on its latest ruling related to foreign ‘money service businesses (MSBs).’

An MSB is a private company that provides certain financial services like check cashing, money orders, title pawn, payday loans, travelers’ checks, prepaid stored value cards, tax refund payments, etc.

Frequently, traditional MSB clients tended to be individuals without bank accounts or access to credit.  But increasingly, the US government is looking at companies engaged in electronic payments, crowdsourced funding, and even microcredit finance as money service businesses.

The implication? They should all be regulated. Even if they’re not even US companies.

That’s right. FinCEN’s latest ruling suggests a foreign MSB may now be subject to US regulations AND CRIMINAL PENALTIES “even if none of its agents, agencies, branches or offices are physically located in the United States.”

FinCEN goes on to say that foreign-located MSBs must also comply with US anti-money laundering regulations and submit ‘suspicious activity reports’, i.e. assimilate into the US financial system and become yet another unpaid spy of the US government.

Further, foreign MSBs must register with FinCEN AND appoint a person residing in the United States as a legal representative in matters of compliance. If not, foreign MSBs risk severe civil and criminal penalties.

Foreign-Located Money Services Businesses:

On July 21, 2011, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register a final rule on definitions and other regulations relating to money services businesses (Final Rule).1 The Final Rule amended the definition of “money services business” at 31 CFR 1010.100(ff). An entity may now qualify as a money services business (MSB) under the Bank Secrecy Act (BSA) regulations based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States. The Final Rule arose in part from the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations.2 FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of the person’s physical location.

Money Services Business:

The term “money services business” includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities:

(1) Currency dealer or exchanger.
(2) Check casher.
(3) Issuer of traveler’s checks, money orders or stored value.
(4) Seller or redeemer of traveler’s checks, money orders or stored value.
(5) Money transmitter.
(6) U.S. Postal Service.

An activity threshold of greater than $1,000 per person per day in one or more transactions applies to the definitions of: currency dealer or exchanger; check casher; issuer of traveler’s checks, money orders or stored value; and seller or redeemer of travelers’ checks, money orders or stored value. The threshold applies separately to each activity — if the threshold is not met for the specific activity, the person engaged in that activity is not an MSB on the basis of that activity.

No activity threshold applies to the definition of money transmitter. Thus, a person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.