The heads of three US financial regulators, the SEC, the CFTC, and FinCEN, have warned the crypto industry to follow US Banking policies in a joint statement published on Friday.
CFTC, SEC and FINCEN warn the crypto industry
The statement was signed by executives from the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchanges Commission (SEC). The document reminds active players in the crypto industry that they must comply with banking and other financial services laws in the United States regardless of how they market their coins or tokens.
The watchdogs were referring to the Bank Secrecy Act (BSA), which defines how various financial services businesses should register with regulatory bodies. More precisely, the agencies elucidated that the nature of digital activity a person indulges would dictate the entity with which the person should register itself with as well as the laws he needs to comply with.
For example, something being referred to as a “security” in the crypto markets may not qualify as a “security” in legal terms. As such, the underlying principles of the asset, as well as its economic realities, would define its regulation.
The executives defined the vision of their respective agencies in additional comments published alongside the joint statement. These remarks addressed futures commission merchants, brokers, broker-dealers, and many other parts of the industry.
This comes at a time when the IRS has started taking an active approach towards cryptocurrencies. The IRS has already released guidance for cryptocurrency markets. Just recently, the agency dispatched drafts of the US Tax Form that included a question regarding the use of cryptocurrencies.