Comments due on FinCEN CVC/LTDA reporting/recordkeeping proposal
The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has issued a proposed rule to be published Wednesday in the Federal Register that would require banks and money services businesses (MSBs) 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 proposed rule complements existing BSA requirements applicable to banks and MSBs by proposing to add reporting requirements for CVC and LTDA transactions exceeding $10,000 in value. Pursuant to the proposed rule, banks and MSBs will have 15 days from the date on which a reportable transaction occurs to file a report with FinCEN. Further, the proposed rule would require banks and MSBs to keep records of a customer’s CVC or LTDA transactions and counterparties, including verifying the identity of their customers, if a counterparty uses an unhosted or otherwise covered wallet and the transaction is greater than $3,000.
Comments on this FinCEN proposal will be accepted for only 12 days from publication, through January 4, 2021.
- Press release
- PUBLICATION UPDATE: Published at 85 FR 83840 on 12/23/2020.
- UPDATE: Proposal and comment period changed— On January 15, FinCEN published [86 FR 3897] a supplemental NPR identifying additional authority for its proposed rule, providing additional information regarding the reporting form, and reopening the comment period. FinCEN is providing an additional 17 days (through 2/1/2021) 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 a jurisdiction identified by FinCEN. FinCEN is providing an additional 45 days (through 3/1/2021) 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.
- FURTHER PUBLICATION AND COMMENT PERIOD UPDATE: On 1/28/2021, FinCEN published a third notice to combine the two comment periods and extend the comment deadline for 60 days, through 3/29/2021, on all aspects of the proposed rule.