Overview:
Cryptocurrencies are not legal tender.
Cryptocurrency exchange platforms are legal, but regulation at the state level can vary.
While it is difficult to find a consistent legal approach at the state level, the U.S. continues to make progress in developing federal legislation on cryptocurrencies.
For example, the Financial Crimes Enforcement Network (FinCEN) does not consider cryptocurrencies to be legal tender. However, it considers cryptocurrency exchange platforms to be money transmitters because cryptocurrency tokens are "another value that substitutes for currency."
The Internal Revenue Service (IRS) does not consider cryptocurrencies to be legal tender, but defines them as "a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value" and has issued tax guidance accordingly.
On the other hand, cryptocurrency exchange platforms are legal in the US and fall under the regulatory scope of the Bank Secrecy Act (BSA).
In practice, this means that cryptocurrency exchange service providers must register with FinCEN, implement an AML/CFT program, maintain appropriate records and file reports with the authorities.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) has indicated that it considers cryptocurrencies to be financial securities and that securities laws should apply comprehensively to both exchange platforms and digital wallets.
In contrast, the Commodity Futures Trading Commission (CFTC) has taken a friendlier "do no harm" approach, describing Bitcoin as a commodity and allowing crypto derivatives to be publicly traded.
Now, FinCEN made it clear that it expects cryptocurrency exchange platforms to collect and share information about the originators and beneficiaries of cryptocurrency transactions. This is in response to guidelines issued by the GAFI in June 2019.
FinCEN places virtual currency exchange platforms in the same regulatory category as traditional money transmitters and applies the same regulations, adding additional regulatory complexities to local crypto companies.
#APfinanciero
- This article about Binance was written by Luca Escobar [@PepeBNB] for APfinanciero. We hope you enjoyed reading it and that you learned something new.
