FinCEN: Precious Metals Dealers Using the Blockchain Need Licensing
- FinCEN has ruled that businesses using Bitcoin’s blockchain to transfer precious metals are considered money transmitters.
The US Financial Crimes Enforcement Network (FinCEN) has ruled that businesses using Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term’s Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term to transfer precious metals are considered money transmitters.
The ruling came in response to an inquiry from an unnamed company, which engages in the brokerage and storage of precious metals. It issues a “digital proof of custody”, registered on Bitcoin’s blockchain, through which the customer can then transfer ownership.
During the past year, numerous startups have sprung up offering consumers the ability to trade precious metals via Bitcoin’s technology, which may make what was once a cumbersome procedure far easier.
FinCEN ruled that the company is both a money transmitter and a dealer in precious metals, precious stones, or jewels, and is thereby subject to the regulations of both regimes. For example, the business must assess the risk of money laundering arising out of non-exempt transactions and implement an anti-money laundering (AML) program to mitigate such risk. In addition, the company is subject to recordkeeping, reporting, transaction monitoring requirements.
FinCEN argued that the fact the Bitcoin blockchain powers the transfers does not absolve the business outside the realm of money transmitters. In a letter, it explained:
“The Company does not fall under the e-currencies or e-precious metals trading exemption from money transmission because, when the Company issues a freely transferable digital certificate of ownership to buyers, it is allowing the unrestricted transfer of value from a customer’s commodity position to the position of another customer or a third-party, and it is no longer limiting itself to the type of transmission of funds that is a fundamental element of the actual transaction necessary to execute the contract for the purchase or sale of the currency or the other commodity.”
The classification as a dealer in precious metals, precious stones, or jewels was more straightforward.
The US Financial Crimes Enforcement Network (FinCEN) has ruled that businesses using Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term’s Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term to transfer precious metals are considered money transmitters.
The ruling came in response to an inquiry from an unnamed company, which engages in the brokerage and storage of precious metals. It issues a “digital proof of custody”, registered on Bitcoin’s blockchain, through which the customer can then transfer ownership.
During the past year, numerous startups have sprung up offering consumers the ability to trade precious metals via Bitcoin’s technology, which may make what was once a cumbersome procedure far easier.
FinCEN ruled that the company is both a money transmitter and a dealer in precious metals, precious stones, or jewels, and is thereby subject to the regulations of both regimes. For example, the business must assess the risk of money laundering arising out of non-exempt transactions and implement an anti-money laundering (AML) program to mitigate such risk. In addition, the company is subject to recordkeeping, reporting, transaction monitoring requirements.
FinCEN argued that the fact the Bitcoin blockchain powers the transfers does not absolve the business outside the realm of money transmitters. In a letter, it explained:
“The Company does not fall under the e-currencies or e-precious metals trading exemption from money transmission because, when the Company issues a freely transferable digital certificate of ownership to buyers, it is allowing the unrestricted transfer of value from a customer’s commodity position to the position of another customer or a third-party, and it is no longer limiting itself to the type of transmission of funds that is a fundamental element of the actual transaction necessary to execute the contract for the purchase or sale of the currency or the other commodity.”
The classification as a dealer in precious metals, precious stones, or jewels was more straightforward.