n April 25, the FBI issued a warning to U.S. citizens about the risks associated with using unregistered cryptocurrency money transmitting services. This advisory emphasizes the importance of ensuring that such services comply with U.S. federal regulations to avoid potential financial disruptions and losses.
Understanding the Risks
The FBI's warning specifies that individuals should avoid using crypto services that do not meet the registration requirements as Money Services Businesses (MSBs) with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). The notice also stresses the significance of adhering to anti-money laundering (AML) standards and the necessity of know-your-customer (KYC) protocols.
Checking for Registration
To mitigate risks, the FBI advises users to verify whether a crypto service is registered as an MSB with FinCEN. It is crucial to note that registration does not imply an endorsement or certification of legitimacy by the government. Furthermore, being listed on third-party platforms like app stores does not guarantee the legality or safety of a service.
Potential Consequences
The advisory highlights that users engaging with unregistered services may face "financial disruptions" or even loss of funds during enforcement actions by authorities. It clarifies that while the notice does not imply that users will be fined or directly targeted by enforcement, the operational risks from using such services could lead to significant financial losses.
Recent Enforcement Actions
The warning follows recent enforcement actions by the FBI and other agencies against platforms like Samourai Wallet, which faced charges for operating an unlicensed money-transmitting business and offering coin-mixing services allegedly used for laundering money. Other notable cases include actions against Tornado Cash, ChipMixer, and foreign crypto exchanges like Bitzlato and BTC-e, all linked to similar charges.
Ensuring Compliance and Safety
The FBI's warning serves as a crucial reminder for cryptocurrency users to ensure compliance with regulatory requirements to safeguard their assets. By choosing registered and compliant services, individuals can reduce the risk of facing financial losses from potential enforcement actions. This advisory underscores the broader movement towards ensuring a safer and more regulated environment for cryptocurrency transactions in the U.S.
