Key Takeaways:
- Regulatory actions against unregistered crypto service providers have been initiated by the FBI.
- The agency has issued a warning to United States citizens.
The Federal Bureau of Investigation (FBI) has issued a stark notice advising individuals to steer clear of cryptocurrency money-transmitting services that lack registration as Money Services Businesses (MSBs) with the Financial Crimes Enforcement Network (FinCEN) in the United States.
The FBI has explicitly undertaken law enforcement actions against unlicensed crypto money services, emphasizing compliance with federal law. Individuals found using unlicensed crypto services, especially involving illegal funds, may face legal repercussions.
The FBI’s broad advisory aims to dissuade individuals from utilizing crypto mixing services, though some experts argue that the warning lacks crucial nuances in understanding decentralized systems.
Michael Bacina, a Digital Asset Partner at Piper Alderman lawyers, advocates for clearer regulatory frameworks and guidance to replace what he calls “regulation by enforcement.”
This announcement from the FBI comes amidst heightened legal tensions between crypto firms and regulators in the United States.
Recent arrests of the co-founders of Samourai Wallet, a Bitcoin wallet and crypto mixing service, on charges of money laundering and operating an unlicensed money-transmitting business underscore the severity of the issue.
The FBI stresses the importance of vigilance, urging individuals to avoid cryptocurrency money transmitting services that fail to collect necessary know your customer (KYC) information.
The FBI further cautions against using crypto services that do not adhere to KYC requirements, warning that such services may put users at risk of losing access to funds after law enforcement operations target non-compliant businesses.
The ambiguity surrounding the designation of Money Services Businesses has raised concerns, with some questioning the implications for privacy developers and wallet providers.
In light of these developments, the FBI recommends using FinCEN’s registration check tool to verify the compliance status of any crypto transaction service. Compliant firms listed in the FinCEN database include well-known platforms such as Coinbase and Kraken (Payward Financial Inc).
