I tried to decipher yesterday's FinCEN ruling on the Definition of Money Services Businesses as far as how it impacts Bitcoin but I'm stumped.
FinCEN ruling statement:
There are a few changes of interest.
1.) "The Prepaid Access NPRM addresses stored value issues as a separate category of MSB.
FinCEN is excluding stored value in any form from being considered a form of money transmission."
I've not read the Prepaid Access NPRM, but this appears to be a positive by excluding a stored value transaction as being considered a money transmission.
2.) The term "dealer in foreign exchange" is replaced with the new term "currency dealer or exchanger," a term used to include the exchange of instruments other than currency as a category of MSB.
I don't think bitcoin is affected by this as bitcoin could hardly be "similar to" the monetary instruments it refers to.
3.) U.S. AML regulations apply to foreign-located persons who offer MSB services in the U.S. from foreign locations.
Did the long arm of the law just get longer?
An entity qualifies as an MSB based on its activity within the United States, not the physical presence of one or more of its agents, agencies, branches, or offices in the United States.
This requirement arose out of the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations.
FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of their physical location.
4.) It is the activities performed that cause a person to be categorized as an MSB subject to anti-money laundering rules [and not necessarily] whether the person is licensed as a business, has employees, or is engaged in a for-profit venture.
Taken to the extreme, this would mean every miner selling bitcoins and every bitcoin buyer and seller would be in violation unless registered as an MSB. Again, if bitcoins are stored value and they are exempted then this is moot.
FinCEN extends Prepaid Access NPRM (Stored Value) comment period 30 days:
Prepaid Access regulation (proposed):
This topic needs more eyes.