Compliance In The Bitcoin Industry Is Difficult To Navigate, And Ever Changing / B Holmes / 2 September 2015

In some jurisdictions regulatory compliance is a necessity for a digital currency organization. Adherence to laws, regulations, guidelines and other specifications relevant to operations is absolute. Violations of regulatory compliance regulations will often result in legal action, often resulting in fines. In the US, the Bank Secrecy Act (BSA) is just one of many financial regulations that must be acknowledged to avoid penalization.

– 2014 Year-End Review BSA/AML and Sanctions Developments, Harvard Law

The BSA legislation was passed in 1970 by the United States Congress. It requires all US financial institutions to collaborate with the US government in cases of suspected money laundering and fraud.

Businesses that transmit or convert money are considered to be Money Services Businesses (MSBs) and must register with FinCEN in order to be compliant. The definition for MSBs was created to encompass not only banks, but also non-bank financial institutions. Should suspicious actions take place, it is the responsibility of the MSB to file Suspicious Activity Reports (SARS) with FinCEN.