All start-ups and ICO’s
that accept digital or fiat currency in exchange for any newly issued tokens must comply to bank secrecy and know-your-customer guidelines, a newly released letter from the Department of the Treasury. The letter was addressed to Senator Ron Wyden, D-Ore, and despite being dated on February 13th
, it was only released on Tuesday, but it stated that all companies and organisations must comply with laws that have been put in place to reduce the risk of money laundering and the financing of terrorism. In order to comply with these rules, the companies must investigate customers and report any suspicious transactions
to the authorities.
This could be troublesome for any new up and coming ICO’s, as well as those who have taken off and sold coins, as the Treasury’s Financial Crimes Enforcement Network could enforce this requirement retroactively. Many ICO’s are one step ahead already though and have registered with FinCEN in anticipation do this upcoming requirement but many still have not. It should be noted that violating this requirement is considered a felony, and is punishable with up to five years in prison.
Many states are yet to regulate cryptocurrencies
and as a result, they could follow in the same footsteps, requiring ICO’s to get money-transmitter licences. It should be noted that start-ups and individuals issuing coins raised a huge $4 billion in funds last year alone, and whilst a lot of these are based overseas and therefore might not wish to comply with the requirement, this is not the same for all of them; however, some are run by just a couple of people and may not actually have the ability to comply to these new regulations.
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