Title: Cryptocurrency Regulations - United States | ComplyAdvantage
Headings: Cryptocurrency Regulations in the
United States

Cryptocurrency Regulations in the United States
Cryptocurrency Exchange Regulations
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Content: Cryptocurrency Regulations - United States | ComplyAdvantage
Cryptocurrency Regulations in the United States
Cryptocurrencies: Not considered legal tender
Cryptocurrency exchanges: Legal, regulation varies by state
While it is difficult to find a consistent legal approach at state level, the US continues to make progress in developing federal-level cryptocurrency legislation. The Financial Crimes Enforcement Network (FinCEN) does not consider cryptocurrencies to be legal tender but considers cryptocurrency exchanges to be money transmitters on the basis that cryptocurrency tokens are “other value that substitutes for currency.” The Internal Revenue Service (IRS) does not consider cryptocurrency to be legal tender but defines it as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value” and has issued tax guidance accordingly. Cryptocurrency Exchange Regulations
Cryptocurrency exchanges are legal in the United States and fall under the regulatory scope of the Bank Secrecy Act (BSA). In practice, this means that cryptocurrency exchange service providers must obtain the requisite license from FINCEN, implement an AML/CFT and Sanctions program, maintain appropriate records, and submit reports to the authorities. Meanwhile, the US Securities and Exchange Commission (SEC) has indicated that it considers cryptocurrencies to be securities, and applies securities laws to digital wallets comprehensively in an approach that will affect both exchanges and investors alike. By contrast, The Commodities Futures Trading Commission (CFTC) has adopted a friendlier, “do no harm” approach, recognising Bitcoin and Ethereum as commodities and allowing other virtual and cryptocurrency derivatives to trade publicly on exchanges that it regulates or supervises. In response to guidelines published by FATF in June 2019, FinCEN has also made clear that it expects crypto exchanges to comply with record-keeping requirements and the “Travel Rule” by sharing information about the originators and beneficiaries of cryptocurrency transactions.