Regulators Seek Clarification on US Money Transmitter Regulations

Crypto Giants Seek Clarity on Money Transmitter Rules

A coalition of major cryptocurrency companies, including Coinbase, Kraken, and Binance, has written to the US Treasury Department's Financial Crimes Enforcement Network (FinCEN) seeking clarity on new rules governing money transmitters in the digital asset space.

The letter, dated January 11, urges FinCEN to provide guidance on the application of its new regulations, which were published in October, to cryptocurrency exchanges and other digital asset businesses. The rules aim to prevent money laundering and terrorist financing in the rapidly growing cryptocurrency market.

The coalition argues that the current lack of clarity on the regulations is causing uncertainty and hindering the growth of the industry. "The uncertainty surrounding the application of the new regulations is having a chilling effect on the industry, causing some companies to delay or abandon their plans to operate in the US market," the letter states.

The companies are seeking clarification on several key issues, including the definition of a "money transmitter" under the new regulations, the scope of the requirement for exchanges to register with FinCEN, and the procedures for reporting suspicious transactions.

The letter also highlights the potential unintended consequences of the regulations, including the potential for legitimate businesses to be inadvertently caught up in the regulatory net. "We are concerned that the current ambiguity could lead to unnecessary regulatory burdens and compliance costs for companies that are not engaging in illegal activity," the letter states.

The coalition is calling on FinCEN to provide guidance on the regulations in a timely manner, in order to ensure that the industry can continue to grow and innovate while also complying with regulatory requirements.

In a statement, a Coinbase spokesperson said, "We believe that clear guidance on the new regulations is essential for the continued growth and development of the cryptocurrency industry in the US. We look forward to working with FinCEN to provide clarity and certainty for our industry."

The letter is the latest development in the ongoing debate over the regulation of the cryptocurrency industry in the US. As the market continues to grow and evolve, regulators are under increasing pressure to provide clarity and guidance on the rules governing the industry.