SEC, CFTC and FinCEN Tells Crypto Industry to Abide By Existing US Financial and Banking Laws


Three major US financial regulators are warning the crypto industry players to adhere to the country’s banking laws.

The warning was given in a joint communique issued on Friday and signed by the heads of Commodity Futures Trading Commission (CFTC) Heath Tarbert, Financial Crimes Enforcement Network (FinCEN) Kenneth Blanco and Securities and Exchange Commission (SEC) Jay Clayton.

The three regulatory bodies are reminding players in the crypto industry that they must adhere to different banking and financial services legislations irrespective of how they describe their digital coins or tokens.

The regulatory agencies pointed out at the Bank Secrecy Act (BSA) that stipulates how various financial services enterprises should be licenced or registered by the relevant regulators. Of importance, the regulators stated that the ‘form of digital asset-related activities’ that an individual engages in will define the regulator that such an individual should register with and which other legislations they must adhere to.

The three heads explained the mandate of their agencies when it comes to cryptos and related services. They addressed such aspects like futures commission merchants, brokers, crypto exchanges, mutual funds, among others. They went ahead to describe the types of companies each of the agency oversees.

The statement also reminded crypto users and handlers of their mandate when it comes to anti-money laundering (AML) and countering the financing of terrorism (CFT).

The regulators reminded individuals and organizations dealing with crypto trading that they have an obligation of reporting as per the Bank Secrecy Act (BSA) emphasizing on illicit use of cryptos, that has been a key focus for the regulators in the recent past.

In regards to AML and CFT, the regulators reminded the crypto players in the market that they have a duty to keep updated records of transactions as well as reporting requirements comprising of suspicious activities.

Apart from the rare joint statement from the three financial regulatory agencies, Cointelegraph reports that earlier today, a draft of a new IRS questions 1040 form for the current fiscal year surfaced and contains a section with a new duty to report crypto assets. It reads:

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

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