FinCEN and State Money Transmitter Regulations for Virtual Currencies

Advances in technology have ushered in tremendous growth and innovation in financial products and services, with the use of cryptocurrencies, blockchain, and other distributed ledger technologies being among the most significant. In addition to FinTech and emerging payments companies, large financial institutions and, more recently, social media platforms and big box retailers are entering the active cryptocurrency marketplace. As entities seek to introduce products and services into this space, they should evaluate the applicability of the federal Bank Secrecy Act ("BSA") and anti-money laundering ("AML") regulations, as well as U.S. state money transmitter laws.

In May 2019, the Financial Crimes Enforcement Network, the federal agency that is responsible for enforcing (with other law enforcement agencies) the BSA and AML regulations, released consolidated guidance on the application of this legal and regulatory framework to virtual currencies (the "Virtual Currencies Guidance"). States have taken different approaches on whether and to what extent virtual currencies should be regulated. Notably, in July 2019 Rhode Island became one of the most recent states to amend its money transmitter law to expressly cover virtual currency business activity. 

This course, presented by Mark W. Rasmussen, partner at Jones Day, and Eric A. Love, associate at Jones Day, will review the Virtual Currencies Guidance; address the latest in the regulatory treatment of virtual currencies under U.S. state money transmitter laws, other state regulations and guidance; and provide practical information about compliance with these complex legal and regulatory regimes.

Learning Objectives:

1. Examine the Virtual Currencies Guidance, highlighting how the BSA and AML regulations apply to particular business models involving virtual currencies, including peer-to-peer exchangers, digital wallets, and payment processors
2. Review the latest developments in state regulation of virtual currencies, such as recent changes to money transmitter laws and the New York Department of Financial Services' creation of a FinTech division that will assume responsibility for licensing entities under that state's BitLicense Regulation
3. Provide practical guidance on how different virtual currency business models can comply with federal and state laws, regulations, and rules