FinCEN Clarifies Money Transmission Regulations Pertaining to DApps

The United States Financial Crimes Enforcement Network (FinCEN) has issued new guidance that contains its financial regulation policies concerning Decentralized Applications (DApps) on May 9. In the introduction to the guide, FinCEN notes the guide serves to clarify and provide examples to make compliance easier for entities whose activities fall under the purview of the Bank Secrecy Act (BSA). FinCEN defines Dapps as, “Decentralized (distributed) application software programs that operate on a P2P [peer-to-peer] network of computers running a blockchain platform.” FinCEN notes that any DApps which “accept and transmit…

FinCEN Says Some Dapps Are Subject to US Money Transmitter Rules

Decentralized applications (dapps) may qualify as money transmitters under U.S. law in certain circumstances, the nation’s anti-money-laundering (AML) regulator said. The Financial Crimes Enforcement Network (FinCEN) published a new guidance sheet Thursday, outlining when and how different companies, individuals and platforms in the crypto space may be money transmitters under the Bank Secrecy Act (BSA) and other relevant laws. The document highlighted dapps among other models. Being designated a money transmitter under FinCEN rules means a firm or person must follow federal AML and know-your-customer (KYC) regulations. In Thursday’s notice,…

Bitstamp Hires Ex-Coinbase Trading Head to Court Wall Street Money

Bitstamp, one of the longest-running cryptocurrency exchanges, has hired a former Coinbase executive and Wall Street veteran as its new head of U.S. operations. Announced Wednesday, Hunter Merghart joined Bitstamp six months after quitting his job as the head of trading at San Francisco-based Coinbase in October. He will lead the opening of the Luxembourg-based exchange’s New York office — the company received a BitLicense from the state last month — and focus on serving institutional clients. Merghart is “the perfect person to lead our U.S. operations, which includes making sure our retail and…

New York State Sees First Conviction for Crypto Money Laundering

A case involving millions of dollars in bitcoin and Western Union payments has resulted in New York State’s first conviction for cryptocurrency money laundering. The Manhattan District Attorney’s Office announced Wednesday that defendants Callaway Crain and Mark Sanchez, both 35, laundered $2.8 million earned through sales of controlled substances carried out over the internet. Between 2013 and 2018, the two men sold steroids and other drugs including Viagra across the U.S. via their website “NextDayGear” and on the dark web. They sold over 10,000 packages and accepted payments in cryptocurrency and…

Brazilian Police Arrest Suspect for Money Laundering With Bitcoin

Brazilian police have arrested a man for operating a clandestine drug laboratory and using the leading cryptocurrency bitcoin (BTC) to launder the proceeds, Cointelegraph Brasil reported on April 24. The State Department of Drug Trafficking (Denarc) in Porto Alegre, Rio Grande do Sul, reportedly located a clandestine bitcoin mining laboratory in a small house while chasing a suspected drug trafficker on April 23. The report says the discovery is “something considered unusual in Rio Grande do Sul.” At the site, law enforcement officials found 25 digital currency mining machines, which…

New York Makes First Money Laundering Conviction Involving Cryptocurrency

In what the Manhattan District Attorney calls the first crypto money laundering conviction in New York, two defendants have pleaded guilty to running a drug trafficking business that laundered millions of dollars in Western Union and crypto payments. According to an official announcement shared by the District Attorney’s office on April 24, 2019, Mark Sanchez and Callaway Crain have pleaded guilty to charges of money laundering through the sale of controlled substances on their website and on the dark web. “These defendants raked in crypto and cash worth millions on…

The Hidden Effects of Crypto Money Laundering Rules

Noelle Acheson is a veteran of company analysis and a member of CoinDesk’s product team. The following article originally appeared in Institutional Crypto by CoinDesk, a free newsletter for the institutional market with news and views on crypto infrastructure delivered every Tuesday. Sign up at the link below.  Ever since Emperor Vespasian held up a gold coin that came from taxing urine and pointed out that it smelt just as clean as others, the separation of money from its origin has been on regulators’ minds. The accelerating flows of digital…

Despite Money Tap Dent, Ripple (XRP) Buy Wave is Strong

Ripple prices up, reacting from 32 cents Money Tap blow, Resona Bank discontinue participation Resona Bank is pulling out of Money Tap initiatives, a project fronted by SBI Group. All the same, prices are stable above 32 cents, reversing from Apr-2 lows and with increasing momentum, may close above 34 cents as bulls shore prices. Ripple Price Analysis Fundamentals At core, Ripple is a network that seeks to provide banks with an alternative messaging and settlement system that is fast, secure and beneficial for the end user. It may be…

WSJ’s ShapeShift Exposé Overstated Money Laundering by $6 Million, Analysis Says

When it comes to cryptocurrency transactions, questions about alleged money-laundering quickly get thorny. A Wall Street Journal investigation from last September, titled “How Dirty Money Disappears Into the Black Hole of Cryptocurrency,” claimed the crypto conversion platform ShapeShift had facilitated at least $9 million worth of money laundering over several years with “a parade of suspected criminals.” Now, at ShapeShift’s request, the blockchain analytics firm CipherBlade recreated the 2018 report and found less than $3 million in transactions involving potentially “tainted” funds. The main distinction here is that CipherBlade focused…