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The original operators of the Coins Offering (ICO) have long known that they may run afoul of US securities laws. However, a recent letter issued by an official of the Treasury Department suggests that country offices could also be subject to criminal laws governing money transfer businesses.

The letter, sent to Senator Ron Wyden (D-OR) and dated February 13, but only released on Tuesday, said companies selling “convertible virtual currency” must comply with bank secrecy and know- you – client guidelines, rules that have been put in place to combat money laundering and the financing of terrorism.

From the letter:

“Generally, under existing regulations and interpretations, a developer who sells convertible virtual currency, including in the form of coins or ICO tokens, in exchange for another type of value that replaces the currency is an issuer to comply with the AML / CFT requirements that apply to this type of MSB [money services business]. “

Peter Van Valkenburgh, director of research at Coin Center, wrote in a blog post that he believed this interpretation of the Bank Secrecy Act was “very consequential” and raised “a major licensing problem for the ICOs “.

According to him, any OIC involving US residents (as issuers or investors) and not enrolling in the Financial Crimes and Enforcement Network (FinCEN), a Treasury office charged with preventing and preventing fraudulent business. investigating financial crimes, could be charged USC § 1960, a federal criminal criminal law that carries a maximum penalty of five years in prison. According to a broad interpretation, Van Valkenburgh said that this law could be applied retroactively and that employees and investors of the company would also be guilty.

Bloomberg reports that some ICO operators had already registered with FinCEN, anticipating that money transfer regulations could be applied to them. However, it is likely that most do not have one.

At the same time, ICOs are also subject to scrutiny by the SEC. As CCN reported, the agency issued assignments to 80 symbolic sales and asked other ICOs – including Overstock-sponsored ICO – to voluntarily submit documents on “all” related to the offers.

Image from Shutterstock to photo

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