U.S. Treasury cautions Bitcoin businesses on legal duties

fincen-guidance17 Dec 2013 / ST. LOUIS (Reuters) – The U.S. Treasury Department’s anti money-laundering unit is warning businesses linked to the digital currency Bitcoin that they may have to comply with federal law and regulation as money transmitters, a Treasury spokesman said.

Treasury’s Financial Crimes Enforcement Network (FinCEN) has sent “industry outreach” letters to about a dozen firms, regarding potential anti-money laundering compliance obligations related to Bitcoin businesses, FinCEN spokesman Steve Hudak told Thomson Reuters’ regulatory information service Compliance Complete.

Bitcoin, which unlike conventional money is bought and sold on a peer-to-peer network independent of any central authority, has grown popular among users who lack faith in the established banking system. It has also raised concerns among law-enforcement authorities that digital currencies could be used for laundering money.
The letters have had a “chilling effect” on Bitcoin businesses, which are intimidated by the threat of civil and criminal sanctions for non-compliance, said Jon Matonis, executive director of the Bitcoin Foundation, an advocacy group. The firms, he said, may effectively be “put out of business in an extrajudicial manner.”….. Read more

http://www.chicagotribune.com/business/sns-rt-us-bitcoin-letters-20131217,0,4901569.story

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