WASHINGTON–The Financial Crimes Enforcement Network (FinCEN) has put forth a proposal involving new requirements for certain transactions involving convertible virtual currency (CVD) or digital assets with legal tender. The proposal would require financial institutions to submit reports, keep records and verify customer identifies under certain circumstances.
According to FinCEN, the objective is to curb the use of virtual currencies to move illicit funds.
FinCEN said the plan would affect transactions involving assets that are held in both “hosted” wallets (those held at a financial institution) as well as “unhosted” wallets (those not hosted by a third-party financial institution).
Under the proposal by FinCEN, financial institutions would be required to file a report with the agency that would need to include information related to a CVD or LTDA transaction and counterparty, and to verify the identity of their consumer, if a counterparty to the transaction is using an unhosted or otherwise covered wallet and the transaction is greater than $10,000.
Other Requirements
FinCEN said financial institutions would also be required to keep records of a consumer’s CVC or LTDA transaction and counterparty – including verifying the identity of their customer/member – if a counterparty is using an unhosted or otherwise covered wallet and the transaction is greater than $3,000.
FinCEN added the proposal does not modify the regulatory definition of “monetary instruments” or otherwise alter existing anti-money laundering regulatory requirements applicable to monetary instruments.
Comments on the proposal are being accepted through Jan. 4.