Fincen Says Digital Currency Guidance Stands, but Talks Continue

The Financial Crimes Enforcement Network will continue discussions with the Bitcoin community after meeting with the Bitcoin Foundation and a host of regulators and law enforcement officers in Washington D.C. today.

“Fincen often acts as the bridge between regulators, law enforcement and the financial industry,” says Jennifer Shasky Calvery, director of Fincen, in an emailed statement. “Fincen regularly conducts this type of outreach and encourages dialogue between interested parties.”

The agency issued guidance on virtual currency in March, although it did not specifically name Bitcoin.

However, the Bitcoin community has felt the heat of the regulation. As Bitcoin businesses try to become compliant by registering as money services businesses (MSBs) and obtaining the proper state licenses, banks have abruptly dropped their accounts. And recently the New York State Department of Financial Services issued 22 subpoenas to emerging payments players, many of which handle bitcoins.

Still, many bitcoin companies are confused by parts of the guidance. For instance, Fincen classifies Bitcoin miners, or the users in charge of keeping the official record of Bitcoin transactions, as MSBs likely because miners are the first people to receive newly created bitcoins.

Today's talks didn't change Fincen's stance: “Fincen’s recent guidance concerning virtual currencies made clear that virtual currency administrators and exchangers that provide services within the U.S. must register with Fincen as money services businesses and that they share similar regulatory responsibilities with other financial institutions,” Calvery says.