FinCEN Fines First-Ever Bitcoin Trader under AML Laws

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FinCEN Fines First-Ever Bitcoin Trader under AML Laws

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The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has penalized what it terms a “peer-to-peer cryptocurrency exchanger” in a historic case of Anti-Money Laundering (AML) violation by a Bitcoin trader.

California resident and Bitcoin seller/buyer Eric Powers was adjudged to have failed to comply with the Bank Secrecy Act (BSA) registration and requirements during a two-year period  between 2012 and 2014. Powers has been fined USD 35,000 and is barred from providing money transmission services.

FinCEN asserts that Powers had sold and bought Bitcoins over the internet without registering himself as a money transmitter or money service enterprise. Additionally, he had not reported suspicious crypto and fiat transactions, with the enforcement body citing 160 Bitcoin transactions worth USD 5 million as well as 200 transactions involving some USD 10,000 in physical currency transfer; all without any currency transaction report.

The trader was also accused of processing suspicious transactions without filing reports, including for darknet marketplace business transactions on Silk Road. Powers has admitted to the violations.

FinCEN director, Kenneth A Blanco, said:

“Obligations under the BSA apply to money transmitters regardless of their size… [Powers] specifically was aware of these obligations, but willfully failed to honor them… Such failures put our financial system and national security at risk and jeopardize the safety and well-being of our people, as well as undercut responsible innovation in the financial services space.”


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