FinCEN adds time to comment on proposal for tracking certain virtual currency transactions

The comment period has been reopened on a proposed rule issued last month on the tracking of certain transactions involving convertible virtual currency (CVD) or digital assets with legal tender (LTDA) status, the Financial Crimes Enforcement Network (FinCEN) said Thursday.

The proposal is aimed at curbing the use of virtual currencies to move illicit funds. FinCEN is providing an additional 15 days for comments on the proposed reporting requirements regarding information on CVC or LTDA transactions greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in jurisdictions identified by FinCEN. It is also providing an additional 45 days for comments on the proposed requirements that banks and MSBs report certain information regarding counterparties to transactions by their hosted wallet customers, and on the proposed recordkeeping requirements.

The new comment periods begin upon publication of the FinCEN notice in the Federal Register, scheduled Friday.

Under the proposed rule, banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.

The notice released Thursday, FinCEN said, also identifies additional statutory authority for the proposed rule under the Anti-Money Laundering Act of 2020, which amended the Bank Secrecy Act’s definition of monetary instruments, provides additional information regarding the reporting form.

The agency said it has already reviewed more than 7,500 comments submitted during the proposed rule’s original comment period, which ended earlier this month.

FinCEN Extends Comment Period for Rule Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions

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