A letter sent to a US Senator by the head of a US Treasury bureau threatens to further complicate things for how ICOs are legislated.
The letter, which was addressed to Senator Ron Wyden, argues that an issuer of ICO coins or tokens is a money transmitter and must, therefore, comply with AML and CFT requirements as a “money services business.”
“Sending Mixed Messages”
Dated from 13th February but released to the public on Tuesday, it appears to come from FinCEN, the Financial Crimes Enforcement Network, a bureau within the US Treasury that enforces laws designed to tackle money laundering and financing terrorism.
When it comes to cryptocurrencies and ICOs, US Regulators have been sending mixed messages on a regular basis for the past month.
First, the heads of the SEC and CFTC stated that while protecting investors was the priority, it was also important to preserve innovation. It then appeared the SEC was only going after outright scams and were taking a “friendly” approach to warning ICOs that they believed were violating securities laws.
This was followed by news that they had, in fact, issued subpoenas to several ICOs. A Twitter user summed the situation up perfectly, tweeting, “Crypto is considered property by the IRS, money by the Treasury department, commodities by the CFTC, and securities by the SEC. In before CDC declares crypto a pandemic.”
The lack of consistency is creating problems for US-based ICOs. Without a transparent approach to regulation, the US appears to be in danger of losing out to countries like Israel, Russia and Singapore which are going out of their way to attract blockchain projects