The global market landscape was thoroughly altered by the COVID-19 pandemic, which ushered in a state of distress across many industries. Amongst the several areas of impact, quarantine measures upended the way financial institutions—like banks and insurance companies—do business, forcing fintech institutions to embrace innovative business models to avoid being left behind or even having to shut down operations.
Regulatory authorities have applied a higher level of scrutiny over fintech companies in recent times, prompting those who operate in this innovative field to be more vigilant. As a result, a focus on compliance and regulations needs to be a core priority at the same level as product development, especially in the early stages.
Businesses engaging in activities involving virtual currencies are subject to a number of obligations by relevant US Federal authorities, including the Financial Crimes Enforcement Network (FinCEN) and the US Department of the Treasury (Treasury). These obligations include registration as a regulated entity, recordkeeping, reporting, and other anti-money laundering (AML) prescriptions set out by the Bank Secrecy Act and its associated implementing regulations (BSA).
The first part of this article series covered the basics of FinCEN cryptocurrency regulation and provided a deeper insight into four key considerations for money services businesses, especially in the field of FinTech. In this part, we take a closer look at one of the most important aspects of FinCEN regulation – the FinCEN Funds Transfer Rule.
The first two parts of this article series covered FinCEN cryptocurrency regulation basics and took a deeper dive into the FinCEN Funds Transfer Rule. The last part of the series focuses on another FinCEN rule and provides a few examples of important FinCEN rulings and their application to the virtual assets arena.
