The US Financial Crimes Enforcement Network (FinCEN) has ruled that companies using the technology underlying Bitcoin to transfer precious metals are considered money transmitters, reported Finance Magnates.
The news outlet said the ruling, issued on August 14, was in response to an inquiry made last month by an unnamed business. The company had asked FinCEN to determine whether its operations and transaction services classify it as a money transmitter as defined under the Bank Secrecy Act.
FinCEN noted in its response that the company’s letter, dated July 15, described the three complementary yet distinct type of activities in which it engages:
- Provides Internet-based brokerage services between buyers and sellers of previous metals in which buyers pay sellers directly by check, wire transfer or Bitcoin.
- Buys and sells precious metals on its own account.
- Holds precious metals in custody for buyers who purchase this service (“customers”), opening a digital wallet for the customer and issuing a proof of custody (a “digital certificate”) that can