The Financial Crimes Enforcement Network of the USA (FinCEN) has published regulations that introduce new accounting and reporting requirements for banking institutions and payment operators working with “autonomous or otherwise unregulated wallets.”
With the introduction of regulations entitled “Requirements for Certain Transactions in Convertible Virtual Currency or Digital Assets”, offline wallets will come under strict anti-money laundering standards. This effectively means anonymous transactions will be a thing of the past.
FinCEN defines stand-alone wallets as “those wallets used by a financial entity not subjected to the Bank Secrecy Law and located in a foreign jurisdiction identified by FinCEN”.
The document states that “convertible virtual currencies” are being increasingly utilized for the purpose of “financing international terrorism, proliferation of weapons, sanctions evasion and money laundering.”
The rules provide for the introduction of the identity verification procedure (KYC) when withdrawing funds over $3000. If the transaction amount exceeds $10,000, firms will have to account to the FinCEN. In this scenario, banks and payment operators will provide data related to the transaction of the client and his counterparty, including names and physical addresses, allowing them to identify the participants in the transaction.
To ensure that no one is making anonymous transfers, FinCEN will require the identification of the splitting of large transactions into smaller ones to circumvent reporting regulations.
