US federal: FinCEN and Bitcoin / convertible virtual currency (CVC)

Bitcoin Research — Law, Regulation, Markets & Origins (2026)

Legislation

2026-10-09

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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.

US federal: FinCEN and Bitcoin / convertible virtual currency (CVC)
Jurisdiction United States, federal
Agency Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury that administers the Bank Secrecy Act (BSA)
What this file covers Everything FinCEN has published on virtual currency / CVC that could be found on 2026-10-09: guidance, administrative rulings, proposed and final rules, special measures, advisories, alerts, notices, trend analyses, enforcement actions, MSB registration and the Travel Rule, plus how FinCEN's rules sit next to the IRS, SEC, CFTC, OFAC and DOJ
Status checked 2026-10-09 (fincen.gov index pages, Federal Register API, GovInfo, reginfo.gov Unified Agenda)
Saved copies sources/fincen/ (full copies of government documents and court opinions; summaries only for news and commentary)

Link convention: [file] links point to the saved copy in ../sources/fincen/. Anything not confirmed from a primary document is marked (unverified). Contested or fringe claims are kept and labelled, with who makes them. This is research, not legal or investment advice.

1. Where things stand on 2026-10-09 (summary)

  • The core rule has not changed since 2013: anyone who, as a business, accepts and transmits Bitcoin or other CVC for others (an exchanger or an administrator, in FinCEN's words) is a money transmitter, which makes it a money services business (MSB). It must register with FinCEN, run an anti-money-laundering (AML) program, file suspicious activity reports (SARs) and keep records, including Travel Rule records. A person who simply buys, holds, mines or spends Bitcoin for themselves is a user, and users are not MSBs. (FIN-2013-G001; FIN-2019-G001; FIN-2014-R001)
  • Both crypto-specific surveillance proposals are dead. On 2026-10-06 FinCEN formally withdrew:
  • the December 2020 "unhosted wallet" proposal, saying it "will not take any further action" (91 FR 63514);
  • the 2023 proposal to treat international CVC mixing as a "primary money laundering concern" (91 FR 63513).

The 2020 joint proposal to lower the Travel Rule threshold to $250 for cross-border transfers, and to state in the rule that CVC is "money", was listed as withdrawn on 2025-04-16 in the Spring 2025 Unified Agenda. No separate Federal Register withdrawal notice was found (reginfo entry). - New rulemaking is about stablecoins. The GENIUS Act (Public Law 119-27, enacted 2025-07-18) makes permitted payment stablecoin issuers (PPSIs) BSA financial institutions. FinCEN has two proposals open, neither final as of 2026-10-09: - an AML/CFT and sanctions-program proposal with OFAC, 2026-04-10 (91 FR 18582); - a customer identification program (CIP) proposal with the banking agencies, 2026-06-22 (91 FR 37234). - Targeted actions against foreign crypto businesses are increasing: - Bitzlato (2023) and PM2BTC (2024), under section 9714 of the Combating Russian Money Laundering Act; - Huione Group (final rule 2025; a proposal to extend it to the successor H-Pay, 2026), under section 311 of the USA PATRIOT Act; - the A7 Network and its A7A5 ruble stablecoin (proposed 2026-10-05). - Enforcement against crypto businesses since 2015: eight FinCEN civil penalties, from $35,350 (Eric Powers, 2019) to $3.4 billion (Binance, 2023). The most recent is Paxful, $3.5 million, on 2025-12-09 (consent order).

2. Legal foundations: the BSA rules that apply to Bitcoin businesses

Rule What it says Source
Money transmitter definition, 31 CFR 1010.100(ff)(5) Money transmission is "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means". Whether someone is a money transmitter "is a matter of facts and circumstances". The phrase "other value that substitutes for currency" is what brings CVC in. 31 CFR 1010.100
2011 MSB rule (76 FR 43585, 2011-07-21) Rewrote the MSB definitions, including the "other value that substitutes for currency" wording. FinCEN's CVC rulings cite it as the basis. 76 FR 43585; FIN-2014-R001, footnote 1
MSB registration, 31 U.S.C. 5330 and 31 CFR 1022.380 An MSB must register on FinCEN Form 107 within 180 days of being established, renew every two calendar years, and keep an agent list. The registration regime was created by the 1999 MSB rule (64 FR 45438). The Anti-Money Laundering Act of 2020 wrote "value that substitutes for currency" into section 5330 (see the amendment notes in the US Code). 31 CFR 1022.380; 31 U.S.C. 5330; 64 FR 45438
Registration is not a licence FinCEN states that registration, and appearing on the MSB Registrant Search page, is "not a recommendation, certification of legitimacy, or endorsement". FinCEN also says it "does not grant licenses". Scammers have shown FinCEN registration as if it were a licence. FIN-2024-Alert005
AML program, 31 CFR 1022.210 Written risk-based program, compliance officer, training and independent review. 31 CFR 1022.210
SARs, 31 CFR 1022.320 MSBs report suspicious transactions of $2,000 or more. 31 CFR 1022.320
CTRs, 31 CFR 1010.311 Reports on transactions in currency (cash) over $10,000. A CVC-to-CVC transfer is not "currency". The 2020 proposal would have added CTR-like reports for some CVC transactions; it was withdrawn. 31 CFR 1010.311; 85 FR 83840
Recordkeeping Rule and Travel Rule, 31 CFR 1010.410(e)-(f) For transmittals of funds of $3,000 or more, the sending institution records, and passes along the payment chain, originator and beneficiary information. See section 8. 31 CFR 1010.410
Who examines MSBs, 31 CFR 1010.810(b)(8) BSA examination authority over financial institutions not otherwise examined by a federal regulator, which includes non-bank MSBs such as crypto exchangers, is delegated to the Commissioner of Internal Revenue. FinCEN keeps the authority to impose civil penalties (1010.810(d)). 31 CFR 1010.810
Criminal backstop, 18 U.S.C. 1960 It is a federal crime to run an "unlicensed money transmitting business". Subsection (b)(1)(B) covers failing to register with FinCEN under section 5330. (b)(1)(A) covers missing state licences. (b)(1)(C) covers transmitting funds known to be criminal proceeds. 18 U.S.C. 1960; explained in US v. Harmon (2020)

3. Guidance and policy statements

FIN-2013-G001: Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies

  • Date: 2013-03-18.
  • What it says:
  • It defines "real" currency as legal tender and "virtual" currency as a medium of exchange that lacks some attributes of real currency. Convertible virtual currency is virtual currency that has a real-currency equivalent or acts as a substitute for one.
  • It creates three roles:
    • user: obtains virtual currency to buy goods or services for themselves. Not an MSB.
    • exchanger: a business exchanging virtual currency for real currency or other virtual currency.
    • administrator: a business that issues virtual currency and can redeem it.
  • Exchangers and administrators that accept and transmit CVC, or buy or sell it, are money transmitters unless an exemption applies.
  • It addresses e-currencies and e-precious metals, centralized CVC, and de-centralized CVC (Bitcoin-type, with no central repository).
  • Status: in effect. It is still listed on FinCEN's guidance page (crawled 2026-10-09), and the 2019 guidance consolidates it.
  • Source: FIN-2013-G001; press release.

FIN-2019-G001: Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies

  • Date: 2019-05-09.
  • What it says: FinCEN says the guidance "does not establish any new regulatory expectations or requirements". It pulls together the 2011 rule and the rulings and guidance issued since, then applies them to these business models:
  • Wallets. Treatment depends on four criteria: (a) who owns the value; (b) where it is stored; (c) whether the owner interacts directly with the payment system; (d) whether the intermediary has "total independent control over the value".
    • Hosted wallet providers are money transmitters.
    • Unhosted wallet users acting for themselves are not.
  • Peer-to-peer (P2P) exchangers, including natural persons, are money transmitters.
  • CVC kiosks (crypto ATMs): owner-operators that accept and transmit value are money transmitters.
  • Decentralized applications (DApps): operators that use a DApp to accept and transmit value are money transmitters.
  • Mixers: an anonymizing services provider (one that accepts and retransmits CVC) "is a money transmitter". An anonymizing software provider (one that only supplies software) is not, because it falls under the exemption for suppliers of delivery, communication or network access services.
  • Other models covered: payment processors, internet casinos, CVC trading platforms and some ICO structures.
  • Travel Rule: when a money transmitter's CVC transaction is a "transmittal of funds", the Funds Transfer Rule and the Funds Travel Rule apply, and the business must register within 180 days.
  • SEC- and CFTC-regulated persons are excluded from the MSB definition.
  • Status: in effect and listed on FinCEN's guidance page. It is contested in court and politically (see section 13).
  • Source: FIN-2019-G001; press release.

Joint Statement on Activities Involving Digital Assets

  • Issued by: Heath Tarbert (CFTC), Kenneth Blanco (FinCEN) and Jay Clayton (SEC).
  • Date: 2019-10-11.
  • What it says:
  • It reminds the market that AML/CFT duties apply to every BSA "financial institution" dealing in digital assets: futures commission merchants (FCMs) and introducing brokers (IBs) registered with the CFTC, MSBs, and broker-dealers and mutual funds registered with the SEC.
  • The label on a digital asset does not decide its regulatory treatment.
  • Status: still posted.
  • Source: joint statement.

FinCEN Notice 2020-2: FBAR filing requirement for virtual currency

  • Date: 2020-12-31.
  • What it says:
  • The FBAR regulations (31 CFR 1010.350) do not currently define a foreign account holding virtual currency as reportable. So a foreign account holding only virtual currency is not reportable on the FBAR.
  • FinCEN "intends to propose to amend" the rule to add virtual currency.
  • Status: no proposed rule found in FinCEN's Federal Register notice list (crawled back to 2011) or the Federal Register API on 2026-10-09. The intended amendment appears never to have been proposed (absence of a proposal not otherwise verified).
  • Source: Notice 2020-2.

AML/CFT National Priorities

  • Date: 2021-06-30.
  • What it says: cybercrime is one of the priorities, "including relevant cybersecurity and virtual currency considerations".
  • Status: in effect. Whether a statutory four-year update has been issued is (unverified).
  • Source: priorities.

4. Administrative rulings (answers to individual companies' requests)

Number Date Question FinCEN's answer Status Source
FIN-2014-R001 2014-01-30 Is a Bitcoin miner an MSB? No, if it mines and uses the CVC for its own purposes. "What is material… is not the mechanism by which a person obtains the convertible virtual currency, but what the person uses [it] for, and for whose benefit." In effect; restated in 2019 guidance file
FIN-2014-R002 2014-01-30 Software developer, and a company investing in CVC for its own account Producing and distributing software is not, by itself, accepting and transmitting value. Investing for one's own account makes the company a user, not an MSB. In effect file
FIN-2014-R007 2014-04-29 Renting computer systems for mining Not an administrator and not a money transmitter In effect file
FIN-2014-R011 2014-10-27 CVC trading platform that matches buy and sell orders for fiat The company would be a money transmitter. Transmitting when a predetermined condition (a match) is met is still money transmission. In effect file
FIN-2014-R012 2014-10-27 Bitcoin payment system that pays merchants The company would be a money transmitter acting as an exchanger. The payment-processor exemption and the "integral to the sale of goods" exemption do not apply. In effect file
FIN-2015-R001 2015-08-14 Physical or digital negotiable certificates of ownership of precious metals The company would be a money transmitter and a dealer in precious metals In effect file

The 2014-01-30 rulings were announced together (press release). FinCEN Director Blanco's 2018 Chicago-Kent speech lists the same set as the core of FinCEN's CVC rulings (speech).

5. Proposed and final rules, special measures and orders

Item Date What it does Status (checked 2026-10-09) Source
Liberty Reserve section 311 finding and NPRM (78 FR 34169; 78 FR 34008) Finding 2013-05-28; published 2013-06-06 Found Costa Rica-based Liberty Reserve, which Treasury called a "virtual currency provider", to be of primary money laundering concern and proposed the fifth special measure Withdrawn 2016-02-24 (81 FR 9139): "material subsequent developments" had mitigated the risk finding; NPRM; withdrawal; press
Travel Rule threshold / "money" clarification joint NPRM, Federal Reserve Board and FinCEN, RIN 1506-AB41 (85 FR 68005) 2020-10-27; comments closed 2020-11-27 Cut the Recordkeeping and Travel Rule threshold from $3,000 to $250 for transfers that begin or end outside the US. State that "money" in those rules covers CVC and digital assets with legal tender status (LTDA), domestic and cross-border. Withdrawn 2025-04-16 per the Spring 2025 Unified Agenda ("Completed Actions"). Earlier agendas planned a second NPRM. No Federal Register withdrawal notice found. NPRM; agenda entry
"Unhosted wallet" NPRM, Requirements for Certain Transactions Involving CVC or Digital Assets, RIN 1506-AB47 (85 FR 83840) 2020-12-23 (announced 2020-12-18) Banks and MSBs would: report CVC/LTDA transactions over $10,000 (or aggregating over $10,000 in 24 hours) with unhosted wallets or wallets hosted in FinCEN-listed jurisdictions; keep records, including counterparty name and address, for such transactions over $3,000; verify customer identity. CVC and LTDA would be declared "monetary instruments". The NPRM cites 17 transactions over $10,000 in 2017-18 between US institutions and unhosted wallets tied to North Korea's Lazarus Group. Comment period was 15 days (to 2021-01-04). It was reopened 2021-01-15 (86 FR 3897), adding AML Act 2020 authority, and extended to 2021-03-29 (86 FR 7352). The Spring 2024 Unified Agenda listed it as "Withdrawn 04/12/2024". It was formally withdrawn 2026-10-06 (91 FR 63514); FinCEN "will take no further action". NPRM; reopening; extension; 2024 agenda; withdrawal
Bitzlato order under section 9714 (88 FR 3919) Issued 2023-01-18; effective 2023-02-01 First-ever section 9714 order. Hong Kong-incorporated CVC exchanger with significant operations in Russia. Covered financial institutions are barred from transmittals of funds involving Bitzlato. In effect (no rescission found in FinCEN's notice list) order; FAQs; press
CVC mixing section 311 finding and NPRM, RIN 1506-AB64 (88 FR 72701) 2023-10-23 (announced 2023-10-19); comments to 2024-01-22 Found international CVC mixing to be a class of transactions of primary money laundering concern. Proposed reports on mixing-linked transactions: amount, CVC type, mixer used, wallet addresses, transaction hashes, IP addresses, narrative. Defined "CVC mixing" broadly: pooling, programmatic code, splitting, single-use wallets, cross-asset exchange, user-initiated delays. Cited the DPRK's 2022 heist laundered through Blender.io and Tornado Cash. The Fall 2025 agenda had it as a long-term action with a final rule due 12/2027. Withdrawn 2026-10-06 (91 FR 63513), citing commenters' concern about a "chilling effect on legitimate activity" and the 2025 Working Group report. FinCEN says it will keep monitoring mixers. NPRM; press; agenda; withdrawal
PM2BTC order under section 9714 (89 FR 82499) Announced 2024-09-26; effective 2024-10-11 Russia-linked CVC exchanger tied to Sergey Ivanov. Covered financial institutions are barred from transmittals involving PM2BTC. Issued alongside OFAC sanctions on Ivanov and the exchange Cryptex. In effect order; press
Huione Group section 311 NPRM (90 FR 18934) and final rule (90 FR 48295) NPRM 2025-05-01/05; final rule 2025-10-14/16; effective 2025-11-17 Cambodia-based conglomerate: Haowang Guarantee, Huione Pay PLC and Huione Crypto. FinCEN says it launders proceeds of DPRK cyber heists and Southeast Asian "pig butchering" scams. The rule bars US correspondent accounts for Huione and requires special due diligence. The final rule cites a Chainalysis finding that Haowang Guarantee processed at least US$49 billion in CVC since 2021. Codified at 31 CFR 1010.664. Final rule in effect NPRM; final; press 2025-05-01; press 2025-10-14
Huione definition amendment NPRM (91 FR 38340) 2026-06-23/25 Adds H-Pay Service PLC (Huione Pay renamed, which FinCEN treats as an attempt to get around the rule) and any "successor entity" to the definition of Huione Group Proposed. Comments were due 2026-07-27, then extended (press release 2026-07-22; new deadline not recorded here). NPRM; press; extension
PPSI AML/CFT and sanctions program NPRM, FinCEN and OFAC (91 FR 18582) 2026-04-08/10; comments to 2026-06-09 Implements the GENIUS Act. Treats PPSIs as BSA financial institutions in a new 31 CFR part 1033. Covers: AML/CFT program; SARs (proposed 1033.320); recordkeeping, including the Recordkeeping and Travel Rules; GENIUS Act duties such as the technical ability to block, freeze and reject transactions and to comply with "lawful orders" to seize, freeze or burn; and an OFAC sanctions compliance program. Would take effect 12 months after a final rule. Proposed (no final rule in FinCEN's list as of 2026-10-09) NPRM; fact sheet; press
PPSI customer identification program NPRM, FinCEN with OCC, Fed, FDIC and NCUA (91 FR 37234) 2026-06-18/22; comments to 2026-08-21 CIP requirement for PPSIs under the GENIUS Act Proposed NPRM; fact sheet; press
AML/CFT Programs NPRM, general, all financial institutions including MSBs (91 FR 18704) 2026-04-10; comments to 2026-06-09 Rewrites the program rules under the AML Act of 2020. Not crypto-specific, but it applies to crypto MSBs and mentions digital assets. Proposed NPRM
A7 Network section 9714 finding and NPRM (91 FR 63208) 2026-10-01/05; comments to 2026-11-04 Finds transactions involving companies outside the US controlled by the A7 Network to be a class of transactions of primary money laundering concern. FinCEN describes A7 as a Russia-linked sanctions-evasion service also used by Iran and the IRGC. It created A7A5, a ruble-backed stablecoin on Tron and Ethereum, with OFAC-sanctioned Old Vector LLC and the exchanges Garantex and its successor Grinex. The rule would bar covered financial institutions' transmittals of funds involving that class. Proposed NPRM; FIN-2026-Alert007

Related Treasury (not FinCEN) GENIUS Act documents: - request for comment on innovative methods to detect illicit digital-asset activity, 2025-08-18 (90 FR 40148); - GENIUS Act ANPRM, 2025-09-19 (90 FR 45159); - issuance, offer and sale NPRM, 2026-08-18, comments to 2026-10-19 (91 FR 53368).

6. Advisories, alerts and notices that deal with CVC

Each FinCEN advisory or alert asks institutions to put a key term in SAR field 2 so FinCEN can find related reports. The terms are listed where they are CVC-specific.

Number Date Topic and CVC content Status Source
FIN-2019-A003 2019-05-09 Core CVC advisory. Typologies and red flags for darknet markets, unregistered P2P exchangers, foreign-located MSBs, CVC kiosks and anonymity-enhanced CVC Active file
FIN-2019-A006 2019-08-21 Fentanyl: purchases with CVC such as bitcoin and monero Active file
FIN-2020-Alert001 2020-07-16 Twitter account-takeover scam ("send CVC and we'll double it") Active file
FIN-2020-A005 2020-07-30 COVID cybercrime: phishing that offers CVC investments Active file
FIN-2020-A006 2020-10-01 Ransomware (payments mostly in CVC) Rescinded 2021-11-08, replaced by FIN-2021-A004 file
FIN-2020-A008 2020-10-15 Human trafficking: prepaid cards used to buy virtual currency on P2P platforms, which then pays for online advertising Active file
FIN-2021-A004 2021-11-08 Updated ransomware advisory Active file
FIN-2022-Alert001 2022-03-07 Russian sanctions evasion, including through CVC; reminds CVC exchangers and administrators of their MSB duties. Key term "FIN-2022-RUSSIASANCTIONS". Active file
FIN-2022-A002 2022-06-15 Elder financial exploitation (CVC as a payment channel) Active file
FIN-2023-Alert005 2023-09-08 "Pig butchering" virtual currency investment scams. Key term "FIN-2023-PIGBUTCHERING". Active file
FIN-2023-Alert006 2023-10-20 Hamas financing, including virtual-currency fundraising Active file
FIN-2024-A001 2024-05-08 Iran-backed terrorist groups' use of CVC and exchangers Active file
FIN-2024-A002 2024-06-20 Fentanyl precursors (cites FinCEN's CVC guidance) Active file
FIN-2024-Alert004 2024-11-13 Deepfake-enabled fraud (mentions CVC) Active file
FIN-2024-Alert005 2024-12-18 Scams abusing FinCEN's name and the MSB registration tool Active file
FIN-2025-A001 2025-04-01 ISIS financing: virtual-currency donation QR codes, unhosted addresses, cross-chain moves Active file
FIN-2025-NTC1 2025-08-04 CVC kiosks (crypto ATMs) used for scam payments and drug-proceeds laundering. Cites FBI IC3 figures for 2024: 10,956 kiosk complaints and about $246.7 million in losses (up 99% in complaints and 31% in losses from 2023). Kiosk operators are MSBs. Key term "FIN-2025-CVCKIOSK". Active file; press
FIN-2025-A003 2025-08-28 Chinese money-laundering networks working for Mexican cartels, using CVC in "mirror" transactions Active file
FIN-2025-NTC2 2025-09-08 Financially motivated sextortion (payments via CVC, P2P apps and kiosks) Active file
FIN-2026-Alert002 2026-05-11 IRGC use of front companies, facilitators and digital asset infrastructure Active file
FIN-2026-Alert003 2026-06-30 Cartel fuel smuggling paid in stablecoins Active file
FIN-2026-Alert004 2026-07-24 Student-aid fraud rings cashing out through digital assets Active file
FIN-2026-Alert005 2026-09-03 Digital-asset investment scam centers in Southeast Asia: guarantee marketplaces, conversion to stablecoins, Huione's "unfreezable" USDH stablecoin. Cites FBI IC3 figures: US losses up from $907 million (2021) to $7.2 billion (2025). Key term "FIN-2026-SCAMCENTERS". Active file; press
Whistleblower bulletin (Iran) 2026-09 Iran-related red flags, including "unusual digital asset payments" and unregistered P2P exchanges Active file
FIN-2026-Alert007 2026-10-01 A7 Network and the A7A5 ruble stablecoin. Key term "FIN-2026-A7NETWORK". Active file

FinCEN items checked that mention CVC only in passing are listed at the bottom of INDEX.md.

7. Financial Trend Analyses (FinCEN's analyses of BSA reports)

Title Date Key numbers Source
Ransomware Trends in BSA Data, January-June 2021 2021-10-15 Bitcoin was the most common ransomware payment method. Blockchain analysis of 177 CVC wallet addresses found about $5.2 billion in outgoing BTC transactions potentially tied to ransomware. file
Ransomware Trends, July-December 2021 2022-11-01 Russia-related malware dominant; ransoms "most often in Bitcoin" file
CVC and online child sexual exploitation / human trafficking (BSA data 2020-21) 2024-02-13 2,311 BSA reports, over $412 million of suspicious activity file; press
Ransomware 2022-2024 2025-12-04 Over $2.1 billion in ransomware payments. 2023 peak: 1,512 incidents and $1.1 billion. Bitcoin used in 97% of reported payments, Monero 2%. file; press
Digital asset investment scams (BSA data 2023-09-08 to 2025-12-31) 2026-09-03 33,904 reports, about $12.7 billion of suspected scam activity file; press

8. The Travel Rule as applied to CVC

  • The rule. 31 CFR 1010.410(e) is the Recordkeeping Rule and 1010.410(f) the Travel Rule. They date from 1995, according to the 2020 NPRM's background (the original 1995 Federal Register text was not retrieved). For each "transmittal of funds" of $3,000 or more, the transmitter's institution must record the originator's name, address, amount, date, payment instructions and beneficiary details, and pass that information to the next institution in the chain. (31 CFR 1010.410)
  • FinCEN's position since 2019. A money transmitter's CVC transfers that are "transmittals of funds" must meet the Funds Transfer Rule and Funds Travel Rule. FinCEN says these rules are "not limited to wire transfers". (FIN-2019-G001, section 2)
  • The attempt to write it into the rule. The 2020 Federal Reserve/FinCEN NPRM proposed to "clarify the meaning of 'money'" so the rules would expressly cover CVC, and to drop the cross-border threshold to $250. That proposal is listed as withdrawn on 2025-04-16. FinCEN's 2019 interpretation stays in the guidance. (NPRM; agenda)
  • Contested: proposing to "clarify" the definition implies the original 1995 text did not plainly cover CVC. Industry commentators have argued this point. The specific commentators were not collected for this file (unverified).
  • Stablecoin issuers. The 2026 PPSI NPRM would expressly bring PPSIs under the Recordkeeping and Travel Rules. (91 FR 18582)
  • International standard. The FATF's Recommendation 16 "travel rule" for virtual asset service providers is the international counterpart (not retrieved; unverified here).

9. MSB registration as applied to Bitcoin businesses

Who Must register as an MSB? Basis
Person buying, holding, spending or investing in BTC for themselves No (user) FIN-2013-G001; FIN-2014-R002
Miner using mined BTC for its own purposes No FIN-2014-R001
Renting mining hardware No FIN-2014-R007
Exchange or trading platform, custodial ("hosted") wallet provider, crypto ATM operator, P2P exchanger in business, BTC payment processor, custodial mixer Yes (money transmitter) FIN-2019-G001; FIN-2014-R011; FIN-2014-R012; FIN-2025-NTC1
Non-custodial wallet software developer; anonymizing software supplier No, per FinCEN guidance. This is contested in DOJ prosecutions; see section 13. FIN-2019-G001
Person registered with and regulated by the SEC or CFTC (broker-dealer, FCM) Not an MSB, but has its own BSA program duties FIN-2019-G001; joint statement
Foreign exchange doing substantial business with US persons Yes. FinCEN applies the MSB rules to foreign-located MSBs (see BTC-e, Binance, Bitzlato). BTC-e assessment; Binance
Permitted payment stablecoin issuer (GENIUS Act) Proposed to become its own category of BSA financial institution (31 CFR part 1033) 91 FR 18582

Mechanics: - Deadlines: register within 180 days of establishment; renew every two years; re-register within 180 days of certain ownership changes or a big increase in agents (31 CFR 1022.380). - Late-registration example: Paxful registered 2015-07-27, 174 days after launch. It was due to re-register by 2016-12-31 and did not do so until 2019 (Paxful order). - Penalties: wilful failure to register carries a per-day civil penalty that is adjusted for inflation each year. The Binance order cites $9,966 per day (Binance). - States are separate: state money-transmitter licences are a different requirement, and failing to get one is itself a federal crime under 18 U.S.C. 1960(b)(1)(A) (18 U.S.C. 1960).

10. Enforcement actions against virtual-currency businesses

No. Date Respondent What FinCEN found Penalty Source
2015-05 2015-05-05 Ripple Labs Inc. and XRP II, LLC First civil action against a virtual currency exchanger. Sold XRP as an unregistered MSB without an adequate AML program. Coordinated with the US Attorney for the Northern District of California. $700,000. The $450,000 forfeiture in the parallel USAO settlement is credited against it. assessment; press PDF; facts; remedial; press
2017-03 2017-07-26 BTC-e (Canton Business Corp.) and Alexander Vinnik Foreign-located exchanger serving US customers; facilitated ransomware and darknet drug sales $110,003,314 on BTC-e; $12,000,000 on Vinnik assessment; press
2019-01 2019-04-18 Eric Powers First action against a P2P exchanger. No registration, no AML program, no SARs or CTRs. $35,350 assessment; press
2020-2 2020-10-19 Larry Dean Harmon, d/b/a Helix and Coin Ninja First penalty against a bitcoin mixer. Unregistered MSB from 2014 to 2020. FinCEN calculated the maximum penalty at $209.1 million. $60,000,000 assessment; press
2021-02 2021-08-10 HDR Global Trading et al. (BitMEX) Unregistered futures commission merchant with no AML program; part of a global settlement with the CFTC $100 million, with $50 million paid to the CFTC credited and $10 million suspended pending a SAR lookback assessment; press
2022-03 2022-10-11 Bittrex, Inc. AML program and SAR failures, including exposure to sanctioned jurisdictions, darknet markets and ransomware; global settlement with OFAC $29,280,829.20, crediting the $24,280,829.20 Bittrex agreed to pay OFAC consent order; press
2023-04 2023-11-21 Binance Holdings Ltd. et al. Wilful failure to register, run an AML program and file SARs. Over 1,000,000 transactions worth more than $500 million between US users and users on Iranian IP addresses (June 2017 - Sept 2021). Agreed to exit the US. $3.4 billion, the largest in Treasury history. $2.47 billion paid to DOJ and CFTC is credited and $150 million is suspended. Five-year FinCEN monitorship. About $4.316 billion in total across agencies. consent order; press
2025-02 2025-12-09 Paxful, Inc. and Paxful USA, Inc. P2P platform with a hosted wallet. More than $500 million in suspicious activity, including Iran, North Korea, Venezuela and Backpage.com; transfers with Helix and other mixers. Late re-registration. Conduct from 2015-02-03 to 2023-04-04. Paxful admitted the facts. $3.5 million, crediting $1.75 million paid to DOJ. Paxful also agreed to pay $4 million to DOJ. consent order; press

Related criminal outcomes (not FinCEN actions): - Harmon pleaded guilty and was sentenced in the D.D.C. case (unverified; plea about 2021, sentence about 2024). - Vinnik pleaded guilty in the US and was later released to Russia in a 2025 prisoner exchange (unverified). - Binance's founder Changpeng Zhao was pardoned by President Trump, as reported in a 2025-12-15 news article (Yahoo Finance; see INDEX). The pardon does not appear to undo FinCEN's civil consent order with the company (unverified legal reading).

11. How FinCEN's rules relate to other federal actors

Actor Role on Bitcoin How it meets FinCEN Sources
IRS Tax: virtual currency is treated as property (Notice 2014-21). Information reporting. (1) Examines non-bank MSBs, including crypto exchangers, for BSA compliance under delegated authority (31 CFR 1010.810(b)(8)); FinCEN imposes the penalties. (2) FBAR enforcement is redelegated to the IRS (31 CFR 1010.810(g)), and FinCEN Notice 2020-2 says virtual-currency-only foreign accounts are not yet FBAR-reportable. (3) Form 8300 / 26 U.S.C. 6050I: the 2021 Infrastructure Act (sec. 80603) added digital assets to "cash" for the $10,000 report. IRS Announcement 2024-4 says digital assets need not be counted until regulations are issued. (4) Broker reporting on Form 1099-DA is (unverified here). Congress's 2025 repeal of the "DeFi broker" rule is confirmed: Public Law 119-5 (H.J. Res. 25, approved 2025-04-10) disapproved 89 FR 106928 (completeness check). Pub. L. 119-5; Notice 2014-21; 1010.810; Notice 2020-2; Announcement 2024-4
SEC Securities law: whether a crypto asset or transaction is a security. Registers broker-dealers. Broker-dealers and mutual funds are BSA financial institutions with their own AML rules (31 CFR parts 1023 and 1024) and are excluded from the MSB definition. The 2019 joint statement reminded everyone of this. On 2026-03-23 the SEC issued an interpretation, with CFTC guidance, on "Application of the Federal Securities Laws to Certain Types of Crypto Assets…" (91 FR 13714). On 2026-10-06 it proposed crypto custody rules (91 FR 63870). Neither was saved here. joint statement; FIN-2019-G001; Federal Register 2026-05635 (https://www.federalregister.gov/documents/2026/03/23/2026-05635/application-of-the-federal-securities-laws-to-certain-types-of-crypto-assets-and-certain)
CFTC Commodities: has said since 2015 that bitcoin and other virtual currencies are "properly defined as commodities" (In re Coinflip). Polices derivatives and fraud. FCMs and introducing brokers are BSA financial institutions (31 CFR part 1026). Joint resolutions with FinCEN: BitMEX (2021, $50 million CFTC payment credited) and Binance (2023). Coinflip order; BitMEX; Binance
OFAC (Treasury) Sanctions: blocks property of designated persons, including crypto addresses; separate from the BSA October 2021 Sanctions Compliance Guidance for the Virtual Currency Industry. Joint or coordinated actions with FinCEN: Bittrex (credit), Binance (parallel OFAC settlement), PM2BTC with Cryptex (2024), the A7 Network (A7 LLC, Old Vector, Garantex and Grinex are OFAC-designated), and the joint PPSI sanctions-program NPRM (2026). Court limit: Van Loon v. Treasury (5th Cir. 2024-11-26) held that Tornado Cash's immutable smart contracts are not "property" that OFAC can block under IEEPA. OFAC's later delisting of Tornado Cash (March 2025) is (unverified here). OFAC guidance; Van Loon; PM2BTC press; A7 NPRM; PPSI NPRM
DOJ Criminal enforcement 18 U.S.C. 1960(b)(1)(B) makes not registering with FinCEN a crime, so FinCEN's definition of "money transmitter" carries criminal weight. Acting AAG Matthew Galeotti said on 2025-08-21 (Jackson, Wyoming) that DOJ will not charge 1960(b)(1)(A) or (B) regulatory violations without evidence that the defendant knew the legal requirement and wilfully broke it. He also said new 1960(b)(1)(C) charges will not be approved against third parties where software "is truly decentralized and solely automates peer-to-peer transactions" and there is no custody, and that "merely writing code, without ill-intent, is not a crime". 18 U.S.C. 1960; DOJ speech (https://www.justice.gov/opa/speech/acting-assistant-attorney-general-matthew-r-galeotti-delivers-remarks-american, read 2026-10-09, not saved)
Banking agencies and states Bank supervision; stablecoin licensing under the GENIUS Act; state money-transmitter licensing Co-proposers of the PPSI CIP rule. State licences are separate from FinCEN registration (1960(b)(1)(A)). PPSI CIP NPRM

12. Court decisions on FinCEN's CVC framework (saved)

  • United States v. Harmon, No. 19-cr-395 (D.D.C., Chief Judge Howell), 2020-07-24.
  • Denied the motion to dismiss. Bitcoin is "money" under the D.C. Money Transmitters Act.
  • Helix's core business "was receiving bitcoin and transmitting that bitcoin to another location or person". That made it a money transmitting business required to register with FinCEN under 1960(b)(1)(B).
  • On whether moving bitcoin between blockchain addresses is transmission to "another location", the court called FinCEN's position "persuasive".
  • Opinion.
  • United States v. Harmon, 2021-04-16. Rejected the claim that 1960 and the D.C. Act are void for vagueness as applied to a bitcoin mixer. Opinion.
  • Van Loon v. Department of the Treasury, No. 23-50669 (5th Cir.), 2024-11-26. Immutable Tornado Cash smart contracts are not "property" of a foreign national or entity, so OFAC "overstepped". This is OFAC, not FinCEN, but it bears on how far Treasury can reach non-custodial code. Opinion.

13. Contested, disputed and fringe claims (kept on purpose, labelled)

Claim Who makes it What the record shows Label
FinCEN's 2019 guidance says non-custodial and anonymizing software providers are not money transmitters, so DOJ's prosecutions of Samourai Wallet and Tornado Cash contradict it Defence lawyers, privacy advocates (e.g. Coin Center), parts of the crypto press The guidance does say an anonymizing software provider is not a money transmitter (FIN-2019-G001). DOJ's position is that its charges did not depend only on FinCEN's registration test. Section 1960(b)(1)(C) (transmitting criminal proceeds) does not turn on registration at all. Which prongs were charged in each case was not confirmed from the indictments here (unverified). Samourai's developers pleaded guilty on 2025-07-30. Roman Storm was convicted in August 2025 of conspiracy to operate an unlicensed money transmitting business, with the jury deadlocked on the other counts. His retrial is set for 2027-04-26 (Decrypt via Yahoo, 2026-08-26). Contested (legal argument; courts have not adopted it so far)
FinCEN officials told prosecutors in August 2023 that Samourai's non-custodial model meant it likely was not an MSB, and prosecutors at first did not disclose this to the defence Reported in syndicated news (Yahoo Finance, 2025-07-30), based on defence filings The reporting is not confirmed from court records here. The Reason opinion piece of 2025-11-07 does not discuss it. Contested / unverified
Samourai sentences were excessive and show "Operation Choke Point 2.0" continuing under Trump Reason (Joakim Book, opinion, 2025-11-07) Rodriguez got 5 years and a $250,000 fine; Hill 4 years (headline only, unverified). Trump said on about 2025-12-15 he would "look at" a pardon. No pardon was found as of that report. Opinion
The 2020 unhosted-wallet rule was warrantless surveillance of non-customers and was rushed through with a 15-day holiday comment period Coin Center and the crypto industry. The claim that it was a "midnight rule" pushed by outgoing Treasury Secretary Mnuchin circulated widely in 2020 (unverified; specific statements not collected). The 15-day comment period is confirmed (comments due 2021-01-04; 85 FR 83840). FinCEN later reopened it to 2021-03-29. FinCEN's own case for the rule cited 17 transactions over $10,000 with Lazarus-linked unhosted wallets. Contested (privacy vs. AML)
The 2023 mixing proposal exceeded section 311, which is limited to transactions "within, or involving, a jurisdiction outside" the US, and denied due process Coin Center (Jason Somensatto, 2026-10-05) FinCEN withdrew the proposal citing the "chilling effect" concern, not the legal argument (91 FR 63513) Contested
The withdrawals mean self-custody and mixing are now permanently safe from FinCEN rules Common reading in crypto media Coin Center itself warns that "the underlying statutory authority to create new, similar bad rules remains" (per Yahoo, 2026-10-05). The withdrawal notice says FinCEN "may take appropriate steps in the future". Section 307 of the Senate CLARITY draft would bar Treasury from requiring institutions to collect data on self-hosted-wallet holders who are not their customers (Croke Fairchild blog, 2026-07-01), but CLARITY is not law. Overstated
The Blockchain Regulatory Certainty Act (section 604 of the Senate CLARITY text) would stop money-transmitter rules applying to non-custodial developers. Supporters say it "codifies existing federal policy"; opponents say it would "materially impair criminal investigations". Supporters: Sen. Ron Wyden. Opponents: Bank Policy Institute, National District Attorneys Association (per Yahoo, 2026-07-06 and 2026-07-09). The House passed CLARITY (H.R. 3633) on 2025-07-17 by 294-134. Senate Banking advanced it 15-9 on 2026-05-14. A CNBC headline of 2026-09-22 says it "stalls in Senate". The Senate's own record shows cloture on the motion to proceed was rejected 49–50 on 2026-09-15 (Roll Call Vote 234, 119th Congress, 2nd session; vote record, added by the completeness check). Not enacted as of 2026-10-09. Bill texts: House engrossed, Senate-reported. Pending legislation; disputed
FinCEN guidance is "regulation by guidance" and not binding, especially now that courts no longer defer to agencies (Chevron overruled by Loper Bright, 2024) Industry lawyers and commentators FinCEN itself says the 2019 guidance creates no new requirements and only applies existing rules. The Harmon court still found FinCEN's reading "persuasive". Loper Bright's effect on FinCEN's CVC interpretations has not been tested in a decision collected here. Contested / untested
"FinCEN-registered" or "FinCEN-licensed" means a crypto business is approved by the US government Marketing by some MSBs; scammers False. FinCEN says registration is not a licence, certification or endorsement (FIN-2024-Alert005). False
Holding or mining Bitcoin makes you an MSB that must register Popular misconception False for users and own-account miners (FIN-2013-G001; FIN-2014-R001) False
FinCEN's 2013 guidance "legalised" Bitcoin Popular framing in 2013 press The guidance only says which BSA duties apply to whom. It does not authorise or ban anything. Misleading
Blockchain-analytics firms that work with the government are not neutral; Chainalysis secretly ran its own Tornado Cash relayer Roman Storm's defence (per Decrypt, 2026-08-26) Defence allegation, not tested here. Separately, Chainalysis sued in August 2026 over an ICE analytics contract awarded to TRM Labs (headlines only). Allegation
FinCEN's withdrawal is "withdrawn, not reversed": a cosmetic change AInvest headline (not read) Headline only Unverified commentary

14. Timeline

Date Event
1999-08-20 MSB definitions and registration rule (64 FR 45438)
2011-07-21 MSB rule adds "other value that substitutes for currency" (76 FR 43585)
2013-03-18 FIN-2013-G001, the first virtual currency guidance
2013-05-28 Liberty Reserve section 311 finding (withdrawn 2016-02-24)
2014-01-30 Rulings on miners (R001) and software/investment (R002)
2014-04-29 Ruling on renting mining computers (R007)
2014-10-27 Rulings on a trading platform (R011) and a payment system (R012)
2015-05-05 Ripple Labs: first civil penalty against a VC exchanger ($700,000)
2015-08-14 Ruling on digital precious-metal certificates (2015-R001)
2017-07-26 BTC-e $110 million; Vinnik $12 million
2019-04-18 Eric Powers, first P2P exchanger penalty
2019-05-09 FIN-2019-G001 guidance and FIN-2019-A003 advisory
2019-10-11 CFTC-FinCEN-SEC joint statement
2020-10-19 Helix/Harmon $60 million, first mixer penalty
2020-10-27 Travel Rule $250 / CVC-as-"money" NPRM
2020-12-23 Unhosted wallet NPRM
2020-12-31 FBAR Notice 2020-2
2021-08-10 BitMEX $100 million
2022-10-11 Bittrex $29.3 million
2023-01-18 Bitzlato, first section 9714 order
2023-10-19 CVC mixing section 311 NPRM
2023-11-21 Binance $3.4 billion
2024-04-12 Unified Agenda lists the unhosted-wallet NPRM as withdrawn
2024-09-26 PM2BTC section 9714 order
2025-04-16 Unified Agenda lists the Travel Rule / CVC NPRM as withdrawn
2025-05-01 Huione section 311 NPRM
2025-07-18 GENIUS Act enacted
2025-08-04 CVC kiosk notice
2025-10-14 Huione final rule (effective 2025-11-17)
2025-12-09 Paxful $3.5 million
2026-04-08 PPSI AML/CFT and sanctions NPRM
2026-06-18 PPSI CIP NPRM
2026-06-23 Huione / H-Pay amendment NPRM
2026-09-03 Scam-centers alert and FTA ($12.7 billion)
2026-10-01 A7 Network alert and section 9714 NPRM
2026-10-05/06 Unhosted-wallet and CVC-mixing NPRMs formally withdrawn

15. Gaps and things not verified

  • The original 1995 Travel Rule and Recordkeeping Rule Federal Register texts were not retrieved; the current CFR text is saved.
  • No FinCEN proposal to add virtual currency to the FBAR was found. That absence was not confirmed beyond FinCEN's notice list and the Federal Register API.
  • The new comment deadline for the Huione amendment NPRM after the 2026-07-22 extension is not recorded.
  • (Resolved by the completeness check, 2026-10-09.) The CLARITY Act's Senate status, previously from news only, is now confirmed by the Senate's record: Roll Call Vote 234 (2026-09-15), cloture rejected 49–50 (sources/fincen-wallet-rule/2026-09-15-Senate-roll-call-vote-119-2-00234-HR3633-cloture.htm).
  • Not checked against primary sources:
  • criminal outcomes for Harmon, Vinnik, the Samourai sentences, and the CZ pardon;
  • OFAC's Tornado Cash delisting;
  • IRS Form 1099-DA. (The 2025 DeFi broker repeal is now confirmed: Public Law 119-5, H.J. Res. 25, approved 2025-04-10, disapproved the IRS rule at 89 FR 106928 so that it has "no force or effect"; sources/fincen-wallet-rule/2025-04-10-Public-Law-119-5-HJRes25-CRA-IRS-DeFi-broker-rule.htm.)
  • FinCEN's own figures for MSB registrations by crypto businesses were not found.