March 29, 2024

US regulator will require verification of the identity of the owners of cryptocurrency wallets

The US Financial Crimes Enforcement Network (FinCEN) has published rules that introduce new requirements.on accounting and reporting for banks and money operators interacting with “autonomous or otherwise unregulated wallets”.

If the rules are put into effect,entitled “Requirements for Certain Transactions in Convertible Virtual Currency or Digital Assets,” offline wallets will begin to be subject to strict anti-money laundering standards, meaning anonymous transactions will become a thing of the past.

FinCEN defines offline wallets as “thosewallets operated by a financial enterprise not subject to the Bank Secrecy Act and located in a foreign jurisdiction identified by FinCEN.

The document states that “convertiblevirtual currencies "are increasingly used for the purpose of" financing international terrorism, arms proliferation, sanctions evasion and money laundering. "

The rules provide for the introduction of a procedureidentity verification (KYC) when withdrawing funds over $ 3000. If the transaction amount exceeds $ 10,000, firms will have to report to FinCEN. In this case, banks and money operators will provide information relating to the transaction of the client and his counterparty, including names and physical addresses, allowing to identify the participants in the transaction.

In order to ensure that no one is making anonymous transactions, FinCEN will require the identification of the splitting of large transactions into smaller ones in order to circumvent reporting requirements.

The new rules correspond to the currentthe FinCEN regulation, which requires regulated financial institutions to report foreign exchange transactions “conducted by or on behalf of one person, as well as multiple foreign exchange transactions, the aggregate amount of which exceeds $ 10,000 in one day”.

FinCEN announced that it will host publiccomments on published rules by January 4th. This provides an opportunity for cryptocurrency companies and the general public to argue against the new rules.

Financial Crime Networkis an agency within the United States Department of the Treasury. FinCEN is committed to combating money laundering, terrorist financing and financial crime.

The day before, it was reported that the US Treasury is going to introduce new rules for money operators who carry out transactions involving autonomous cryptocurrency wallets.

Rumors about regulation of individual cryptocurrency wallets in the United States first appeared in November, when Coinbase CEO Brian Armstrong tweeted about it.

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