Financial Crimes Enforcement Network Releases Digital Currency Rules

January 31, 2024         By: Kevin Xu

The United States’ Financial Crimes Enforcement Network has made two rulings that clarify the bureau’s stance on digital currency miners and company investments.

The first ruling is a huge boon to the bitcoin mining community. The Financial Crimes Enforcement Network has ruled that “virtual currency” (read: digital currency) miners are not money transmitters.

These digital currency rules follow FinCEN’s guidance from March 2013 that strongly hinted at the possibility of bitcoin miners being ruled as money transmitters, and would require all miners to register as such.

Though most individual miners would likely not consider themselves a money transmitter, this guidance reaffirms that fact and allows for the continued mining of these currencies to remain unhindered.

It is unclear if bitcoin mining companies have to register if they conduct business in the United States since FinCEN states miners are in the clear if they mine “solely for a user’s own purposes.” Bitcoin mining companies provide services for another party, so there is still some room for interpretation.

The second ruling clarifies that companies who wish to purchase, sell, or invest in virtual currencies can do so, as long as it’s for the company’s own benefit.

It would appear now that the burden of compliance would fall on entities that deal with digital currencies (who have to register as money transmitters) as an exchange service.

FinCEN’s rulings can be seen here.