Isle of Man’s Financial Supervision Commission (FSC) issued a recent update on the state of Bitcoin and virtual currencies.
Previously, the FSC stated its intentions to clarify the rules surrounding virtual currency activities. Even in so doing, they made clear their intention to facilitate a regime beneficial for the growth and development of Bitcoin.
Like its previous announcement, the FSC states the need for attention to anti-money laundering (AML) matters. It is making amendments to its 2008 Proceeds of Crime Act in consideration of virtual currencies.
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Unlike its previous announcement, however, the FSC is explicit about the risks posed by virtual currencies. The island will not require the equivalent of money transmission licenses from Bitcoin businesses, unless they are also engaged in the transmission of fiat. In terms of AML measures, they will wait for clarification in the form of “international consensus”.
The policy contrasts with those of other countries, such as the US and Canada, which now define virtual currencies as money for AML purposes. The US’s FinCEN requires registration as a Money Services Business (MSB) even from companies transmitting solely virtual currencies.
As such, the FSC update warns that consumers will not be protected in the virtual currency market. While the government is investigating, “the Commission’s view is that this can be a high risk area for participants who do not understand the risks involved, and they need to be aware that there is no Government protection in place for them.”