FinCEN, an enforcement arm of the U.S. Department of Treasury, has ruled that companies using the bitcoin block chain to transfer precious metals are considered money transmitters and therefore subject to anti-money laundering restrictions.
The ruling came in response to a letter from an unnamed company seeking clarification on this point.
FinCEN posted the ruling on its website to serve as guidance to financial institutions.
Firm Requests Clarification
The ruling came in response to a company’s request for clarification about whether its operations and transaction services make it a money transmitter as defined under the Bank Secrecy Act (BSA). FinCEN found that the company would be a money transmitter and a dealer in precious metals, precious stones, or jewels pursuant to FinCEN regulations.
FinCEN said the company derives its income from charging a transaction fee on transfers of digital certificates by customers and a custody fee for precious metals held in custody.
The company holds precious metals in custody for buyers and opens a digital wallet