Joint Warning from Financial Regulators
In an unprecedented show of collaboration, the heads of the three main financial regulatory bodies in the U.S. have banded together to issue a critical advisory for crypto users. On October 11th, the Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), and Securities and Exchange Commission (SEC) united their voices to underscore the serious respect of anti-money laundering (AML) and countering the financing of terrorism (CFT) obligations.
The Essence of the Statement
The regulators’ statement serves as a stark reminder about the compliance responsibilities that crypto traders must adhere to under the Bank Secrecy Act. The message is clear: using crypto without meeting regulatory obligations can lead to some hefty consequences, and they mean business. It reads, “Among those AML/CFT obligations are the requirement to establish and implement an effective anti-money laundering program (AML Program) and recordkeeping and reporting requirements, including suspicious activity reporting (SAR) requirements.” Basically, if there’s any funny business going on, these regulators are going to sniff it out.
Notable Signatories
This rare joint action was signed by three heavyweights in the field: Heath Tarbert (CFTC), Kenneth A. Blanco (FinCEN), and Jay Clayton (SEC). You might say they’re the ‘Three Musketeers’ of financial regulation—except they’re wielding regulations instead of swords.
Recent Shifts in Regulation
Earlier this month, excitement and caution have danced a fine waltz within the cryptocurrency scene. On October 10th, during a conference, Tarbert dropped a bombshell by suggesting that Ether (ETH) should be considered a security, igniting speculation about ETH futures trading potentially blasting off soon. Meanwhile, a cold splash of discouragement arrived when the SEC rejected Bitwise’s proposed Bitcoin (BTC) exchange-traded fund. It seems like the race to become the first approved BTC ETF by U.S. regulators continues to be a game of musical chairs, with no one left standing yet.
Tax Season and Crypto Reporting
The regulatory attention isn’t stopping there. On the same day, whispers of new IRS draft forms began to circulate, specifically the 1040 form for the upcoming fiscal year, prompting a fresh responsibility for individuals dealing with crypto assets: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” So if you were hoping to skirt around reporting, think again! The IRS wants you in their sights.
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