tl;dr
The FBI has issued a warning about the risks associated with using unregistered crypto money transmitting services, emphasizing the importance of compliance with US federal law, especially regarding anti-money laundering (AML) requirements. All such services are required to register with the Financi...
Financial News Unregistered Crypto Services Pose Risks, FBI Warns
The FBI has issued a warning about the risks associated with using unregistered crypto money transmitting services, emphasizing the importance of compliance with US federal law, especially regarding anti-money laundering (AML) requirements. All such services are required to register with the Financial Crimes Enforcement Network (FinCEN), and consumers are advised to verify this registration before use. The warning comes in the wake of recent law enforcement actions against a Bitcoin wallet for alleged money laundering and operating an unlicensed money-transmitting business, underscoring the ongoing challenges in the crypto industry.
United States Federal Law Regarding Crypto Money Transmitting Services
United States federal law requires all crypto money transmitting services to register with the Financial Crimes Enforcement Network (FinCEN). The FBI encourages US citizens to verify the registration of any crypto money transmitting service as an MSB with FinCEN before using it. Registration alone does not confirm the legitimacy or safety of the service; it merely indicates compliance with certain regulatory requirements.
Adherence to AML Protocols and KYC Information
Besides the registration, crypto money transmitting services should also adhere to stringent anti-money laundering protocols in the country. The FBI noted that consumers should be wary of services that do not request Know Your Customer (KYC) information, as platforms lacking essential KYC protocols have a higher likelihood of scams and criminal activity.
Enforcement Actions and Ongoing Challenges in the Crypto Industry
The FBI's latest announcement came after recent actions against the Bitcoin wallet Samourai, highlighting the ongoing challenges in the crypto industry, particularly the balance between privacy and legal compliance.
Read more:
Top Web3 Privacy Challenges & How to Overcome Them
Data Privacy: 10 Tips to Protect Your Digital Privacy in 2024
Sources: Exodus, SunContract, PrimeXBT, Coinrule, Coinex, FBI
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