The cautionary alert issued by the Federal Bureau of Investigation (FBI) advises Americans to steer clear of unregistered cryptocurrency money-transmitting services.
Incident Overview: The FBI’s advisory, which focuses on smart-contract-driven privacy tools, was part of a public service announcement on April 25. It emphasized the importance of using registered Cryptocurrency Money Services Businesses (CMSBs) that adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
Recent law enforcement actions have targeted non-compliant cryptocurrency services operating outside federal regulatory boundaries. The FBI warns that individuals using such services may face financial disruptions, especially if their funds are mixed with those obtained unlawfully.
Aditional Information: An intern earned $1M from the well-known ‘Buy Bitcoin’ sign
The legal landscape surrounding cryptocurrency in the U.S. is growing more complex. This complexity was highlighted by the recent arrest of Samourai Wallet co-founders Keonne Rodriguez and William Hill on charges of money laundering and operating an unlicensed money-transmitting business. If convicted, they could face up to 25 years in prison.
The definition of a Money Services Business (MSB) remains a contentious issue. Ryan Sean Adams, a co-founder of Bankless, expressed concerns about the FBI’s stance, questioning the broad application of the MSB classification to various crypto services. This uncertainty extends to the treatment of code or crypto wallets within regulatory frameworks.
On the same day, Ethereum ETH/USD development firm Consensys sued the SEC, alleging an effort to designate Ether as a security through enforcement actions rather than explicit, purpose-built regulation.
Future Prospects: The growing tensions between cryptocurrency entities and regulators highlight the urgent need for clear regulatory structures. This topic will be a focal point at the upcoming Benzinga’s Future of Digital Assets event on Nov. 19.
Subsequent Reading: Maxine Waters Hints at Imminent ‘Stablecoin Bill’
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