FinCEN issues new guidance on convertible virtual currencies

Published on May 09, the guidance, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies (CVC) …

The Financial Crimes Enforcement Network (FinCEN) has issued guidance on cryptocurrencies in order to provide regulatory certainty for businesses and individuals.

Published on May 09, the guidance, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies (CVC) has been issued in response to the queries from various financial institutions, law enforcement, and regulators concerning the regulatory treatment of multiple variations of businesses dealing in CVCs.

The latest guidance, FinCEN said, does not establish new regulatory expectations. It only consolidates current FinCEN regulations, guidance and administrative rulings relating to money transmission involving cryptocurrencies, and applies the same interpretive criteria to other common business models involving CVC.

“This guidance is intended to help financial institutions comply with their existing obligations under the BSA [Bank Secrecy Act] as they relate to current and emerging business models involving CVC,” the document states.

FinCEN clarified that its rules define certain businesses or individuals involved with CVCs as money transmitters subject to the same registration requirements and a range of anti-money laundering, program, recordkeeping, and reporting responsibilities as other money services businesses.

The guidance explains in detail how its money transmission regulations apply to several common business models involving transactions in CVC, including Peer-to-Peer (P2P) exchangers, CVC wallets, CVC kiosks, and Decentralized Applications (DApps), among others.

In addition to the guidance, FinCEN has also issued an Advisory on Illicit Activity Involving Convertible Virtual Currency to assist financial institutions in identifying and reporting suspicious activity related to criminal exploitation of CVCs for illicit activities such as money laundering and sanctions evasion, among others.

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Yet another cryptocurrency exchange is shutting shop in India

In April 2018, India’s central bank barred all bourses and virtual currency traders from maintaining a bank account or having any business relationship …

Another Indian cryptocurrency exchange is downing its shutters.

Coinome, backed by the online payment gateway Billdesk, announced yesterday (May 09) that it will be halting operations from May 15. However, it remains unclear if the company plans to exit the Indian market completely or has only temporarily shut shop.

Recent regulatory changes introduced by the Reserve Bank of India (RBI), a lack of policy clarity from the government, and a consequent slowdown in trading volumes, are believed to be the reasons behind Coinome’s move.

“India is currently going through uncertainty on crypto guidelines and regulations. The government of India has not yet taken a decision on the regulatory framework for crypto exchanges or wallets. Further, the supreme court is yet to act upon the public interest litigation (PIL) on (the) regulation of cryptoassets,” the exchange informed its customers in an email, a copy of which has been accessed by Quartz.

Coinome is not the only exchange to be stifled by the regulatory environment.

In September 2018, Zebpay, then the biggest cryptoexchange in India, had created shockwaves by announcing the closure of its Indian operations. In March, Coindelta announced its plans to fold its business saying it is no longer viable.


In April 2018, India’s central bank barred all bourses and virtual currency traders from maintaining a bank account or having any business relationship with lenders from July that year. This slammed the brakes on the flourishing virtual currency ecosystem.

Hit by the decision, cryptocurrency firms then dragged the RBI and the Indian government to the country’s top court. The final hearing of the case commenced in September last year but till now there is no resolution in sight.

“A lot of people were expecting that the hearing in March will provide some clarity as the government had been asked to bring about a regulation in four weeks but nothing happened,” said the owner of another struggling virtual currency exchange, under the condition of anonymity. “A lot of players are beginning to lose hope.”

A high-level panel was constituted by the Indian government in 2017 to come up with guidelines for the crypto currency ecosystem. Led by the top bureaucrat Subhash Chandra Garg, it has representatives from the RBI and the market regulator Securities and Exchange Board of India (Sebi).

A recent report, which suggested that this committee is looking at a complete ban of cryptocoins, had spooked the market. Now, it is likely that any clarity will emerge only after the results of India’s ongoing general elections are announced on May 23.

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4 ways to make money with cryptocurrencies

From success stories of overnight millionaires, to harrowing tales of insane amounts owed in back taxes, the crypto market is a place where fortunes …

From success stories of overnight millionaires, to harrowing tales of insane amounts owed in back taxes, the crypto market is a place where fortunes can be made and lost in the blink of an eye.

The lure of easy money and massive returns has gotten punters and investors scrambling for a piece of the pie. Defined as a digital or virtual currency which acts as a medium of exchange between two parties, it goes without saying that cryptocurrencies are here to stay.

Bitcoin or BTC is the most popular form of cryptocurrency with the 2017 crypto rush driving the value of Bitcoin up to absurd values. Created by Satoshi Nakamoto, Bitcoin offers users anonymity in making payments and conducting business online which makes it a popular choice for those who value their privacy.

In recent times Bitcoin has become increasingly accepted as a medium of exchange with many online merchants and even some countries recognizing Bitcoin as legal tender. From speculation to investment, there are many ways in which one can make money of cryptocurrencies.

Getting Started

Before you get started, you’ll first need to get your hands on some cryptocurrencies. Signing up with a cryptocurrency exchange allows you to purchase different types of cryptocurrencies with cash.

The most reputable crypto exchanges offer wallet services for storing your crypto currencies. However, several high profile online heists that have resulted in stolen crypto currencies means that you may want to invest in a wallet for greater security.

Turning a Profit with Cryptocurrencies

  1. Mining Bitcoins

We won’t pretend to understand the complexities behind Bitcoin mining, so we’ll keep it simple. Essentially, Bitcoin mining is the process of solving a series of equations which are then added to a blockchain. With each successful transaction, the miner is rewarded with Bitcoins.

When Bitcoin was still in its infancy, it was relatively easy for miners to turn a profit. As time progressed however, Bitcoin mining became increasingly resource intensive requiring large amounts of processing power. Coupled with the recent crash in the price of Bitcoins, mining may not be the best method of making money.

However, all hope is not lost, as at the time of writing, Bitcoin prices have been steadily increasing which means that mining may indeed be profitable.

  1. Price speculation

Price speculation is one of the simplest ways of earning money with cryptocurrencies, much and much more stable than betting on horse racing results. All you’ll need to do is to purchase a basket of different cryptocurrencies and hold them until they increase in value.

Ideally, you’ll want to purchase more established cryptocurrencies such as Bitcoin and Etherium to provide your portfolio with a measure of stability with a small set of more volatile coins.

You can expect the cryptos held by you to appreciate against fiat currencies such as the US Dollar or Pound Sterling over time. When that time comes, you’ll be able to sell your cryptocurrencies at a profit having made money from the price differential.

It is a good idea to keep a close eye on the valuation of your cryptocurrencies in order to capitalize on any sudden opportunities. Also, having a good understanding of real world events is essential to staying ahead.

This investment method is a great way for you to get started in the world of cryptocurrencies with minimal input on your part.

  1. Holding onto cryptocurrencies for dividends

For the inexperienced investor, dividend paying cryptocurrencies are a great way of earning a steady passive income. Dividends are described in corporate terms as a percentage of the company’s earnings paid out to shareholders.

In the case of dividend paying cryptocurrencies, you’ll receive a regular payout for holding said cryptocurrency in your wallet. Such cryptocurrencies are a great way of parking funds whilst receiving a steady return.

However, you may not want to invest your entire portfolio on such currencies. This is because, on top of the typical risks associated with cryptocurrencies, there’s also the risk that you may become the victim of a scammer looking to solicit funds from unsuspecting investors.

Along with this, such cryptocurrencies typically have a lock-up period which prevents you from removing your funds for a specific period of time. Thus, leaving you exposed to the risk of said currency crashing in value.

  1. Staking funds

The practice of staking funds has become increasingly popular in the wake of the longest bear market in crypto history. Staking requires an investor to place his/her own cryptocurrencies into a hot wallet for a set amount of time. In return, the investors receive a payout as a reward for their time.

Similar to how banks make use of funds invested into fixed deposits, cryptocurrency received from staking is used for the purpose of validating new block chains. From receiving a fixed income of cryptocurrencies to eliminating the need to invest in costly mining equipment, staking has its fair share of benefits.

However, this investment method does have its downsides. Firstly, staking requires that cryptos be stored in hot wallets which are constantly online. This means that you may find yourself becoming the victim of a hack attack and subsequently losing everything.

Secondly, staking requires your cryptos to be tied down for a significant amount of time thus exposing you to the risk of a downwards price change. Cryptocurrencies are the new frontier of investment and for the savvy investor, opportunities abound are everywhere.

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Bitcoin Price Explodes Towards $6300

… rather it emphasizes the obligation of financial institutions to the Bank Secrecy Act (BSA) as it relates to business models involving virtual currencies.

There has been some discussion as to what what might have caused the recent run, first past $4,500, then $5,000, and now the $6,200 level.

The United States Treasury recently released a detailed document emphasizing the execution of existing regulations to business models to virtual currencies.

The Financial Crimes Enforcement Network (FinCEN) issued “interpretative guidance”, which described regulations and their application to transactions involving cryptocurrencies,

…FinCEN regulations relating to money services businesses (MSBs) apply to certain business models involving money transmission denominated in value that substitutes for currency, specifically, convertible virtual currencies (CVCs).

The document does not employ new regulations, rather it emphasizes the obligation of financial institutions to the Bank Secrecy Act (BSA) as it relates to business models involving virtual currencies.

The publication covers a lot of subjects relating to cryptocurrencies and the market, including dapps, exchanges, decentralized exchanges, ICOs and wallets, and is well worth reading.

Hot News


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May 10, 2019



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Facebook wants to test its cryptocurrency in a country that’s trying to ban it altogether

India’s central bank, the Reserve Bank of India (RBI), has clamped down on virtual currencies, banning new investments and future transactions …

  • India is going to be the testing grounds for Facebook’s attempt at building a ‘stable’ cryptocurrency.
  • The tech giant plans to pilot the stablecoin project in India as the country’s market still has room to expand, according to industry insiders.
  • India’s central bank has not been very welcoming to the idea of virtual currencies.

Most crypto currencies are infamous for their volatility but Facebook is trying to change that. And, India might have the front row seats to the social networking giant’s first attempt at building a stablecoin according to Bloomberg.

Insiders say that India has been chosen for pilot testing the virtual currency, as the country’s cryptocurrency market has room to expand.

The ultimate aim is to target the Indian remittances market using the stablecoin via WhatsApp, to facilitate overseas transactions.

India’s indecision

But Facebook might have got the timing wrong. India’s central bank, the Reserve Bank of India (RBI), has clamped down on virtual currencies, banning new investments and future transactions — much to the dismay of its passionate advocates.

The ban came in despite media reports that a government committee had favoured virtual currencies in India, just a few weeks back. A member of the committee had stated, “There is a general consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders.”

The Indian government is looking to make it the ban official with ‘Banning of Cryptocurrencies and Regulation of Official Digital Currencies bill 2019’, a draft bill that is yet to turn into law, under the Prevention of Money Laundering Act (PMLA).

Troubled waters for Facebook

Facebook-owned WhatsApp Pay has been in the beta testing mode, for over a year now with no signs of an official launch in the horizon.

The primary reason for that is RBI’s new data localization policy which requires all financial data of Indian users to stored on local servers — a roadblock Facebook is yet to overcome.

When it comes to stablecoin or what some call ‘Project:Libra’, most of the details are classified. But, insiders say that Facebook’s new cryptocurrency could be either be pegged to the US dollar or a basket of currencies, to keep it stable.

Facebook is expected to make an official announcement about stablecoin in the next quarter but an official launch is still far away.

Perhaps, by the time that it’s ready to go live, India’s digital economy will be more accepting.