US Treasury agency, has proposed the introduction of new reporting, recordkeeping and identity verification requirements for banks and money services businesses (MSBs) engaged in cryptocurrency transactions on behalf of clients. In particular, the proposals focus on transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA). Under the proposal, banks and MSBs will be required to file a report with FinCEN for any CVC and LTDA transactions exceeding USD 10,000 within 15 days from the transaction date. They would further require to keep records of a customer’s CVC or LTDA transactions and counterparties, including verifying the identity of their customers, if a counterparty uses an unhosted or otherwise covered wallet and the transaction is greater than USD 3,000.
Proposed rule would require financial institutions to record information about, and, in some cases report, significant cryptocurrency transactions that also involve unhosted wallets, allowing law enforcement agencies to more quickly and accurately track money flows to identify and stop financial crime. Information banks and MSBs would be required to collect includes the customer’s name and address, the transaction details, the counterparty’s name and address, and any payment instructions and forms received from the customer, among other information. FinCEN proposes to categorize CVC and LTDA as “monetary instruments” for the purposes of the Bank Secrecy Act, in order to implement the proposed requirements.