Topic: US Bitcoin ATM Regulation 101 (Read 1660 times)

Bitcoin ATMs and the regulations that impact them are getting a lot of attention lately. In effort to try and educate Bitcoin ATM operator hopefuls, I’ve compiled a knowledge dump of what I have learned since I began looking into this (August 2013). I wish I could have understood all this from the beginning. It would have saved me months and thousands of dollars.

Federal:
The main objective of regulation at the Federal level is to prevent money laundering. The Financial Crimes Enforcement Network (FinCEN) defined Bitcoin exchanges as Money Services Businesses (MSBs), further, they are defined as a Money Transmitter which is a type of MSB. As such, they are subject to the requirements of the Bank Secrecy Act (BSA). The BSA requires MSBs and other forms of money transmitters to create, maintain, and follow an Anti-money laundering (AML) program. The MSB also must appoint an AML compliance officer. The AML program defines how the MSB will, by way of business rules and processes, comply with the BSA. That typically includes how they identify their customers and record the activity of each one within the scope of the business. If that activity crosses certain thresholds (as defined by the AML program), reports such as Suspicious Activity Reports (SARs) must be submitted to FinCEN. Registration is required at the Federal level (unlike the state level in which operators must apply for a license) and is pretty simple. You simply sign up on the website. Done. They don’t worry about you unless an issue comes up.