While Japan has been cracking down more on cryptocurrency exchanges recently, we see the state of Wyoming opening things up to make the state more attractive to the technology. At the same time, the SEC defined ICOs as money transmitters and crypto exchanges as money exchange businesses. It is rapidly becoming easier to run afoul of these quickly changing clarifications and find yourself in hot water.
On the lighter side, words such as “cryptocurrency,” “blockchain” and “ICO” are joining “Bitcoin” in the dictionary as officially recognized and defined words.
Featured stories by Amy Castor, Michael Scott, Jay Derenthal and Aaron van Wirdum
Japan is cracking down hard on cryptocurrency exchanges, having just recently penalized seven of them and requiring two to halt operations for one month. Japan’s Financial Services Agency (FSA) announced on March 8, 2018, that it came down on the exchanges due to their failure to provide proper internal control systems. All of the exchanges were ordered to step up efforts to improve security and prevent money laundering.
Of the seven, Coincheck was served with its second business improvement order since the $530 million breach of NEM (XEM) were stolen from it earlier this year. All of the 260,000 users impacted by the theft will be paid back in Japanese yen, based on NEM rates at the time of the theft, the Tokyo-based company said.
In the latest regulatory backlash against ICOs, the SEC has decided that, effectively, anyone who sells tokens is an unregistered money transfer business and anyone issuing an ICO is a money transmitter that is subject to the Bank Secrecy Act. Exchanges also qualify as money services businesses (MSBs) according to FinCEN.
An ICO registered as a security, however, would not be considered a money transmitter. Anyone failing to register with FinCEN and failing to perform KYC AML compliance obligations could face prison under a felony conviction. Employees and investors of ICO companies