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The central bank is floating the concept of using the Internet to facilitate the direct clearing of transactions between financial institutions, which would likely diminish its own role in the U.S. payment system.
February 11 -
Two small U.S. banks will begin offering an alternative remittance option. The development may signal a new era of competition in foreign exchange, but some critics see danger.
September 24 -
While financial institutions are apt to remain wary of the cryptocurrency and others like it, the industry is ready for more-controllable versions of its distributed-ledger technology, a new report argues.
April 7 -
The cost of complying with New York State's proposed BitLicense regulations would wipe out many smaller digital currency businesses. But there is a middle ground: placing those businesses under the supervision of a self-regulating incubator that would help them develop robust yet affordable compliance programs.
April 13
The digital currency firm Ripple Labs just made history but not the kind it's been hoping for.
U.S. authorities have fined the San Francisco startup $700,000 over violations of the Bank Secrecy Act, according to the Financial Crimes Enforcement Network's Tuesday
The action surprised digital currency experts and comes as a blow for the company, which has positioned itself as one of the most establishment-friendly firms in the field since it was founded in 2013. Two U.S. banks have signed up to use Ripple Labs'
But according to Fincen, in its early days Ripple Labs functioned as an unregistered money service business and neglected to comply with anti-money laundering regulations. The civil money penalty against Ripple Labs and its subsidiary, XRP Fund II, was jointly issued by Fincen and the U.S. Attorney's Office for the Northern District of California.
"Virtual currency exchangers must bring products to market that comply with our anti-money-laundering laws," Fincen director Jennifer Shasky Calvery said in a press release. "Innovation is laudable but only as long as it does not unreasonably expose our financial system to tech-smart criminals eager to abuse the latest and most complex products."
Monica Long, a spokeswoman for Ripple Labs, reiterated the company's focus on regulatory compliance Tuesday.
"An early company in an emerging, undefined fintech category, Ripple Labs was one of the first to proactively build out a compliance and risk program," Long said in a statement, pointing out that since January 2014 the company has hired a chief compliance officer, general counsel and BSA officer and continued to flesh out its AML program. "Weve been consistent in our message of supporting a compliant and healthy Ripple ecosystem. We have not willfully engaged in criminal activity, nor has the company been prosecuted."
Ripple Labs' regulatory problems began when Fincen released
The settlement also cites XRP II for failing to report suspicious transactions, including processing a $250,000 transfer of virtual currency while waiving know-your-customer requirements for a Ripple Labs investor. The investor, Roger Ver had
As part of the settlement, Ripple Labs and XRP II have agreed to take measures to improve AML compliance, including limiting XRP transactions to registered money service businesses and hiring independent auditors to review the companies' BSA compliance every two years through 2020.
Ripple Labs will also make "enhancements" to its payment protocol that will allow the company "to appropriately monitor all future transactions," according to Fincen. This may come as worrisome news for Bitcoin entrepreneurs who have argued that regulation of their ecosystem should apply to companies on the edges of the network but not the software protocol. The meaning of the passage was
Digital currency businesses have also argued that early-stage startups should have an "
