As recently reported, FINCEN issued significant guidance on legal issues with virtual currency. Shortly thereafter, an enforcement action was initiated against Mt. Gox, one of the largest bitcoin exchanges for operating without the proper licenses. The use of virtual currency is prevalent and an important part of many social media…
The U.S. Department of the Treasury has targeted Liberty Reserve S.A. as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act (Section 311). According to Financial Crimes Enforcement Network (FinCEN) press release, Liberty Reserve – a web-based money transfer system or “virtual currency” –…
FinCEN recently issued interpretive guidance to clarify that it views certain activities involving convertible virtual currencies as money transmission services under the Bank Secrecy Act and FinCEN regulations. If your business involves creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies, you may be subject to FinCEN’s registration, reporting, and…
A new Manhattan bar has become one of the few brick and mortar operations to accept Bitcoins as a method of payment. What are Bitcoins? They are essentially a form of digital cash or virtual currency. They are unique in that there is no central issuing or regulatory authority (such…
FINCEN has recently issued what is perhaps the most specific piece of regulatory Guidance on the financial regulatory issues with virtual currencies. This guidance clarifies the applicability of the Bank Secrecy Act (“BSA”) to entities creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies. These guidelines relate to a wide variety of virtual…