The U.S. regulatory forces have launched a full-fledged attack on cryptocurrency services that are not registered to the U.S. and do not comply with their rules.
The Federal Bureau of Investigation has warned American consumers about the risks of using cryptocurrency money-transmitting services not registered as Money Services Businesses (MSBs).
FBI’s Warning on Unlicensed Cryptocurrency Services
In a recent Public Service Announcement, the FBI alerted consumers to the dangers of unlicensed cryptocurrency money-transmitting services. According to the announcement, these services fail to comply with federal regulations, pose significant user risks, and may be subject to law enforcement actions.
This alert aims to prevent individuals from engaging with services that do not meet anti-money laundering (AML) requirements or collect required “know your customer” (KYC) information.
Consequences of Using Unregistered Services
The FBI’s warning is not general but comes with a consequential provision.
The FBI notice warns customers that using unlicensed cryptocurrency services could lead to financial disruptions if these businesses are subject to law enforcement operations. Because these services often intermingle legitimate funds with those obtained through illegal means, users may lose access to their cryptocurrency or experience significant delays in regaining access.
The FBI underscores that law enforcement will investigate services that purposely break the law or facilitate illegal transactions. Law enforcement targeting a business can lead to significant disruptions for users.
Consequently, users should ensure that any service they use complies with federal regulations to avoid unexpected financial complications.
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Tips for Identifying Registered Services
To help consumers avoid unregistered cryptocurrency services, the FBI offers several practical tips such as –
Before using a money-transmitting service, individuals should check whether it is registered as an MSB with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The FBI recommends visiting the FinCEN website to confirm a service’s registration status.
The FBI advises against using services that do not ask for KYC information, such as name, date of birth, address, and identification, before allowing money or cryptocurrency transactions.
Users should be wary of services that advertise illegal activities or have a reputation for being used by criminals to launder funds.
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