What Is the Financial Crimes Enforcement Network (FinCEN)?
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of Treasury. Its mission is to safeguard the financial system from illicit use and combat money laundering and other financial crimes. FinCEN collects, analyzes, and shares information related to suspicious activities involving banks, money services businesses, virtual currency exchangers, foreign exchange dealers, casinos and card clubs. In addition to sharing this data with law enforcement agencies worldwide in an effort to prevent criminal activity, FinCEN also develops regulations that set standards for compliance with anti-money laundering laws.
FinCEN has become increasingly important as digital currencies have gained popularity among investors. The agency has issued guidance on how certain entities must comply with federal anti-money laundering laws when dealing with cryptocurrencies such as Bitcoin or Ethereum. For example, any company dealing in virtual currencies will be required to register as a Money Services Business (MSB). This includes cryptocurrency exchanges, ATM operators and peer-to-peer exchangers who buy or sell digital assets for cash or other forms of payment in amounts greater than $10K per day or $50K annually. Additionally these companies are subject to know your customer requirements which may include collecting personal identification documents from customers before processing transactions over specific thresholds .
Finally it’s important for all organizations involved in cryptocurrency transactions — including individuals — to understand their obligations under applicable laws enforced by FinCen so they can mitigate risks associated with money laundering and terrorist financing activities linked to cryptocurrencies
