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.
Smart contracts and other related topics, such as proof-of-stake, have begun to raise several new questions about how to understand and address compliance. They represent an important frontier for blockchain innovation.
Rapid growth in crypto innovation and adoption is leading regulators to seek to close regulatory loopholes in the industry. Striking a balance between protecting the public good and managing innovation risks will help create a foundation for greater reliability and further growth. Regulation that limits money laundering and financial crime is an essential piece of the puzzle.
Legal and Compliance functions can at first glance seem to be closely intertwined for an outside observer. Indeed, both broadly deal with regulations and the impact of breaking them. However, the similarity falls short of the specific roles of legal and compliance and their related tasks. In fact, these roles work best when entrusted to separate experts. While combining these roles might seem appealing, especially for early-stage startups, there are conceptual differences to consider beforehand.
