In a settled enforcement case announced August 9, 2021, the SEC fined Poloniex, LLC, a crypto trading platform, for operating an unregistered securities exchange. Then, on August 10, 2021, the CFTC and FinCEN announced a settled enforcement case against crypto exchange BitMEX for anti-money laundering violations and failure to register with the CFTC as a trading platform. The cases highlight US regulators’ increased focus on cryptocurrency exchanges.
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FinCEN Issues $60M Fine for Convertible Virtual Currency BSA Violations
On Monday, October 19, the Financial Crimes Enforcement Network announced a $60 million civil money penalty against Larry Dean Harmon, the founder, administrator and primary operator of unlicensed convertible virtual currency “mixers” for alleged violations of the Bank Secrecy Act and its implementing regulations.
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Structured Finance and Securitization 2019 Year in Review
In 2019, Hunton Andrews Kurth LLP’s structured finance and securitization team closed a number of substantial transactions, developed novel structures for our clients and advised on important tax, regulatory and other industry developments, including emerging uses of blockchain solutions.
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FinCEN Director Discusses Virtual Currency Reporting Trends
On December 10, 2019, FinCEN Director Kenneth Blanco delivered prepared remarks to a banking conference held in Washington, DC. Among topics he discussed were trends in suspicious activity reporting (SARs) since FinCEN published updated guidance on convertible virtual currency (CVC) in May 2019.
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House of Representatives Approves Bipartisan Blockchain Bill
On September 19, 2019, the House of Representatives by voice vote approved H.R. 2613, a bipartisan bill entitled the “Advancing Innovation to Assist Law Enforcement Act.” The bill instructs the director of FinCEN to study and prepare a report to Congress on emerging technologies, including blockchain, in an effort to combat money laundering and other forms of illicit finance. Though somewhat modest in scope, the bill is among the first to be approved by one of the chambers of Congress on the topic of blockchain.
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New FinCEN Guidance on Virtual Currency
On May 9, 2019, FinCEN, the U.S. federal agency charged with combating money laundering, issued two new interpretive documents of interest to the crypto community. The first is interpretive guidance titled “Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies”. The second document is an “Advisory on Illicit Activity Involving Convertible Virtual Currency”.
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FinCEN Announces First Enforcement Action Against Peer-to-Peer Virtual Currency Exchange
On April 18, 2019, the Financial Crimes Enforcement Network (“FinCEN”) announced its first enforcement action against a peer-to-peer virtual currency exchanger, which also included its first civil monetary penalty against a virtual currency exchanger, for failure to file Currency Transaction Reports (“CTRs”).
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AML and Sanctions Compliance Issues Facing Cryptocurrency Companies
In an article written by Hunton Andrews Kurth lawyers in Crowdfund Insider, Richard Garabedian and Shaswat Das discuss the Financial Crimes Enforcement Network’s enforcement actions and related compliance issues. This blog contains a link to the full article.
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