FinCEN forces Americans to start reporting all offshore crypto holdings in their newly proposed amendment to the Bank Secrecy Act FBAR filing requirements that we will read more about in today’s crypto news.
With the new rules, the FinCEN forces Americans to disclose overseas crypto holdings over $10,000 under the newly proposed rule. The rule will bring FBAR rules around crypto holdings in line with the ones applying to cash and this follows another proposed update to crypto regulations which require exchanges to perform the KYC on customers’ private wallets.
Rather than prematurely adopting a rule on this complex topic, Treasury should immediately begin a transparent process to engage with Congress and industry, building a consensus to drive America forward. (3/8)
— Cynthia Lummis (@CynthiaMLummis) December 18, 2020
The Financial Crimes Enforcement Network wants US citizens to report if they hold more than $10,000 in crypto with foreign digital currency service providers. FinCEN notice 2020-2 that was filed on Thursday, will amend the Bank Secrecy Act’s Foreign Bank and the Financial Accounts regulations and as per the notice:
“FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account.”
The rule change will bring the FBAR rules around crypto in line with the ones applying to cash held by US citizens that are outside of the US. Under the current regulations, the notice stated “a foreign account holding virtual currency is not reportable on the FBAR.” The notice also made no mention of when the proposal is set to be implemented or what information the holders will be required to report like blockchain addresses. Individuals filing FBARs have to provide the name of the account, the name of the address of the bank where the funds are held, and the account number. Also, it will have to include the type of account and the maximum value held during the year.
The move is a part of the flurry of proposed crypto changes in regulatory terms coming from the Treasury Department just weeks before the leadership is expected to change under the Biden Administration. FinCen proposed a change to regulations that classify “convertible virtual currency” and “legal tender digital assets as monetary instruments” making them subject to the requirements of the Bank Secrecy Act.
The move requires money service businesses to report crypto transactions to unhosted wallets to the FinCen. Privacy advocates, politicians, and crypto businesses expressed concerns about the proposed rule changes as well. Steve Mnuchin queried the “rushed process” and requested that the current 15-day review period should be extended to 60 days.
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