2 mins
By Lynn Wang
Updated by Harsh Notariya
In Brief
- The FBI warns Americans about the risks of using unregistered crypto money transmitting services.
- These services often lack anti-money laundering compliance, increasing the risk of scams and fraud.
- The FBI’s warning follows enforcement actions against Samourai Wallet for unlicensed operations.
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The US Federal Bureau of Investigation (FBI) has raised concerns about using crypto money transmitting services that lack proper registration as Money Services Businesses (MSB) in compliance with United States federal law.
The FBI emphasizes the dangers associated with utilizing platforms that are not registered with regulatory authorities. This concern extends to platforms that do not adhere to federal regulations, especially those related to anti-money laundering (AML) requirements.
Unregistered Crypto Services Pose Risks, FBI Warns
United States federal law requires all crypto money transmitting services to register with the Financial Crimes Enforcement Network (FinCEN). Therefore, the FBI encourages US citizens to verify the registration of any crypto money transmitting service as an MSB with FinCEN before using it.
However, it’s important to note that registration alone does not confirm the legitimacy or safety of the service; it merely indicates compliance with certain regulatory requirements.
Besides the registration, crypto money transmitting services should also adhere to stringent anti-money laundering protocols in the country. Additionally, the FBI noted that consumers should be wary of services that do not request Know Your Customer (KYC) information.
“For example, avoid cryptocurrency money transmitting services that do not collect know your customer (KYC) information from customers when required,” the FBI advised.
The bureau sees that platforms lacking essential KYC protocols have a higher likelihood of scams and criminal activity. Nonetheless, the presence of a service in popular application stores does not guarantee its legality or adherence to federal regulations.
The FBI’s latest announcement came after recent actions against the Bitcoin wallet Samourai. Its privacy-oriented features were targeted by US law enforcement.
In collaboration with other law enforcement agencies, the FBI seized the wallet’s infrastructure and arrested key individuals. Charges against them include money laundering and operating an unlicensed money-transmitting business. Moreover, authorities claim that Samourai’s service was used to launder over $100 million in criminal proceeds.
This enforcement action highlights the ongoing challenges in the crypto industry, particularly the balance between privacy and legal compliance.
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