U.S. Senator Ron Wyden received a letter last month, indicating that the Financial Crimes Enforcement Network (FinCEN), will be regulating individuals or organizations who are doing ICOs. The letter was released by FinCEN today.

In the letter published by Coin Center, Assistant Secretary of FinCEN Drew Maloney writes that organizations conducting ICOs and crypto market exchanges must register their ICO tokens as a money transmitter and stay within KYC regulation to avoid felony charges under U.S. law. FinCEN classifies any selling of virtual currency, including ICO tokens, for another type of value that substitutes for currency is a money transmitter. These regulations were put in place to prevent illegal operations funded by virtual currency.





"FinCEN maintains a team of analysts to examine BSA filings from virtual currency money services businesses (MSB) and other emerging payments providers, including filings pertaining to digital coins, tokens, and Initial Coin Offerings (ICOs), to proactively identify trends and risks for money laundering, terrorist financing, and other financial crimes, and provide this information to U.S. law enforcement and other government agencies."





Developers who are looking to start an ICO will have to comply with AML/CFT requirements. ICOs will also be monitored closely by the Securities Exchange Commission and the Commodities Futures Trading Commission. These institutions are set to enforce the AML/CFT obligations with businesses conducting ICOs.

"The application of AML/CFT obligations to participants in ICOs will depend on the nature of the financial activity involved in any particular ICO. This is a matter of the facts and circumstances of each case."



