Trends in Bitcoin Regulation








Securities Law Blog

On October 27, 2014, FinCEN issued two administrative rulings to companies seeking guidance on whether a company would be required to register as an MSD as defined under the BSA and be subject to the required reporting, recordkeeping, and monitoring obligations. In its first letter, it responded to whether a company’s plans to set up a virtual currency trading and booking platform, similar to a traditional securities or commodities exchange, would make it subject to FinCEN regulations.  FinCEN stated that the proposed virtual trading platform would be classified as a Money Servicing Business (“MSB”) and would have to register as such under the Bank Secrecy Act (“BSA”).

In the second ruling, FinCEN addressed whether a company that converts traditional currencies into Bitcoin to facilitate payments must comply with regulations that govern Money Services Businesses under the Bank Secrecy Act.  The payment system would accept customers’ credit card payments and deliver the payments to sellers in the form of Bitcoin.

FinCEN ruled that company setting up the payment system would be classified as a money transmitter, and subject to BSA regulations, because it is “a business in accepting and converting the customers’ real currency into virtual currency for transmission to the merchant.”

The significance of FinCEN’s ruling for such a company is that the company must engage in record keeping and reporting that would pierce a customer’s anonymity.

For further information about Bitcoin regulations, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202N, Boca Raton, Florida, (561) 416-8956, [email protected] or visit  This memorandum is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855