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New Reg Alert details FinCEN’s proposed rule on CVC mixing
NAFCU sent member credit unions a Regulatory Alert detailing the Financial Crimes Enforcement Network’s (FinCEN) proposed rule to require domestic financial institutions to implement certain recordkeeping and reporting requirements for transactions involving convertible virtual currency (CVC) mixing. CVC mixing is a process that obscures the source of funds.
In the Regulatory Alert, NAFCU notes the rule provides an exemption for the use of internal protocols or processes used to execute transactions by banks, broker-dealers, or money services businesses, including virtual asset service providers (VASPs), that would otherwise constitute CVC mixing. However, those institutions would be required preserve records of the source and destination of CVC transactions.
Additionally, the association highlights that Bitcoin is included in FinCEN’s proposal even though it is classified as legal tender in some jurisdictions.
The Regulatory Alert outlines three questions for credit unions to consider in their feedback. Credit unions can submit comments to NAFCU until Jan. 5; comments are due to FinCEN Jan. 22.