- Americans should not use crypto services offered by companies that are not registered as money services businesses (MSBs) under federal law, the Federal Bureau of Investigation (FBI) said on Thursday.
- The FBI also provides an official tool from FinCEN that allows users to check whether a company is registered as an MSB.
The FBI has warned Americans not to use unregistered cryptocurrency transfer services.
Americans should avoid using crypto services offered by companies that are not registered as money services businesses (MSBs) under federal law and do not comply with anti-money laundering rules, according to a statement Thursday from the FBI’s Internet Crime Complaint Center (IC3).
"A few simple steps can prevent the inadvertent use of noncompliant services," the FBI wrote in a news release. “For example, avoid cryptocurrency money transmission services that do not collect customer information when required.”
KYC information usually includes details such as name, date of birth and address.
The FBI also recommends users use the Financial Crimes Enforcement Network (FinCEN) tool to find out if a business is registered as a money services business. When The Block used the tool, cryptocurrency companies such as Coinbase and Kraken (legally known as Payward Financial Inc) emerged.
“The FBI has recently conducted enforcement actions against cryptocurrency services that are not licensed under federal law,” the statement said. “Persons who use unlicensed cryptocurrency money transmission services may experience financial disruption during enforcement actions, particularly if their cryptocurrency is commingled with funds obtained through illicit means.”
The FBI also warns users not to use crypto services that do not ask for KYC information (such as name or address) before allowing you to send or obtain cryptocurrency. It added that apps in the app store may not necessarily follow federal compliance requirements or facilitate legal services.
“Cryptocurrency remittance services that knowingly violate the law or knowingly facilitate illegal transactions are subject to investigation by law enforcement,” the FBI press release added. “Using services that fail to comply with their legal obligations may put you at risk of losing the source of your funds following enforcement actions targeting these businesses.”