The regulatory authorities in the United States have launched a thorough crackdown on cryptocurrency services operating beyond U.S. jurisdiction and failing to comply with regulatory standards.

A comprehensive alert has been issued by the Federal Bureau of Investigation (FBI) to caution American consumers about the potential risks associated with using unregistered cryptocurrency money-transmitting services that are not recognized as Money Services Businesses (MSBs).

FBI’s Caution Regarding Unlicensed Cryptocurrency Services

In a recent Public Service Announcement, the FBI underscored the dangers linked to unlicensed cryptocurrency money-transmitting services. These services are reportedly non-compliant with federal regulations, posing significant risks to users and potentially facing legal consequences.

The main purpose of this alert is to discourage individuals from interacting with services that do not follow anti-money laundering (AML) protocols or fail to collect essential “know your customer” (KYC) information.

Implications of Utilizing Unregistered Services

The FBI’s advisory is not only precautionary but also accompanied by a warning of potential outcomes.

Customers are alerted by the FBI that using unlicensed cryptocurrency services could lead to financial disruptions if law enforcement takes action against these entities. Due to the mingling of legal and illicit funds by such services, users may encounter difficulties accessing their cryptocurrency or experience significant delays in recovering their assets.

The FBI stresses that any intentional violation of the law or facilitation of illicit transactions by these services will trigger law enforcement inquiries, potentially resulting in substantial disruptions for users.

Therefore, users are urged to confirm that the services they utilize comply with federal regulations to prevent unforeseen financial complications.

Tips for Identifying Registered Services

To help consumers avoid unregistered cryptocurrency services, the FBI offers practical suggestions, including:

• Before using a money-transmitting service, individuals should verify its registration status as an MSB with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
• The FBI recommends checking the FinCEN website to confirm a service’s registration status.
• Users are cautioned against using services that do not require KYC information, such as personal details and identification, before facilitating financial transactions involving money or cryptocurrency.
• Exercise caution with services that endorse illicit activities or have a track record of being utilized by criminals for money laundering purposes.