A ruling from the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) has closed in on money launderers using precious metals to disguise illicit transactions who intend transacting in the bitcoin virtual currency.

Traders in precious metals that use bitcoin will be considered money transmitters as well as metals traders and are therefore subject to anti-money laundering restrictions as they apply to financial institutions.

Clarification provided

FinCEN’s ruling responded to a letter from an unnamed company seeking clarification about whether its operations and transaction services make it a money transmitter as defined under the Bank Secrecy Act (BSA).

FinCEN ruled that the company is considered both a money transmitter and a dealer in precious metals, precious stones, or jewels pursuant to FinCEN regulations.

Therefore the company must abide by regulations that apply to both of those activities.

Risk assessment

When acting as either a money transmitter or a metals dealer, FinCEN says the company must assess the money laundering risk involved in its non-exempt transactions, and implement an anti-money laundering programme to mitigate such risk.

In addition, the company must comply with recordkeeping, reporting, and transaction monitoring requirements under FinCEN regulations.

The FinCEN ruling can be found here.

Categories: Trade Based Financial crimes News