US regulators have come together to issue a joint statement reminding those engaged with digital asset to meet anti-money laundering (AML) and counter financing terrorism (CFT).
The U.S. Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the U.S. Securities and Exchange Commission (SEC) were the bodies which issued this notice.
For the statement, the bodies refer to digital assets as any instrument which qualifies under US laws on securities, commodities, and security- or commodity-based instruments such as futures or swaps.
There are various terminologies for digital assets which has left room for confusion in compliance. An example, an exchange used for digital asset might not qualify as an exchange that is used under federal securities laws.
However, regardless of what the terminology market participants use, the agencies have stated it is the facts and circumstances underlying an asset, activity or services which determines categorization and regulatory treatments.
The nature of digital asset-related activities a person engages with determines whether and how they should register themselves with CFTC, FinCEN, or the SEC. A commodity, for example, might trigger registration and obligations through the Commodity Exchange Act (CEA), while activities through a security might require obligations through federal securities laws.
If a person comes under the definition of financial institution, its AML and CFT activities are overseen by more than one agency.
Copyright © 2019 FinTech Global
Copyright © 2018 RegTech Analyst
