In a recent advisory, the Federal Bureau of Investigation (FBI) has issued a stern warning to Americans regarding the use of cryptocurrency money transmitting services that fail to comply with U.S. federal law. Specifically, the FBI is targeting services not registered as Money Services Businesses (MSB) under the pertinent laws (31 U.S.C. § 5330; 31 CFR §§ 1010, 1022), and those not adhering to anti-money laundering protocols.
Importance of MSB Registration
The FBI’s concerns are underscored by recent law enforcement operations aimed at unlicensed cryptocurrency services. The agency warns that individuals using such services face significant risks, including potential financial disruptions. This is particularly likely during law enforcement actions targeting these services, especially if the funds are mixed with money obtained through illicit activities.
Risks of Using Non-compliant Services
There are heightened risks associated with cryptocurrency money transmitting services that intentionally violate the law or facilitate illegal transactions. Such services are subject to rigorous investigations by law enforcement agencies, and users may lose access to their funds if these businesses are targeted.
Also Read: FBI Investigates Event Tied to Dashjr’s Bitcoin Hack
How to Protect Yourself
To safeguard against these risks, the FBI recommends several precautionary measures:
- Verify MSB Registration: Prior to using any money transmitting service, ensure it is registered as an MSB with the Financial Crimes Enforcement Network (FinCEN). FinCEN’s website (https://www.fincen.gov/msb-state-selector) provides a platform to check a company’s registration status.
- Caution with Non-KYC Services: Be wary of any financial service that does not request “Know Your Customer” (KYC) information, such as your name, date of birth, address, and ID, before allowing transactions.
- Scrutiny of App Legitimacy: Just because an app is available in an app store does not guarantee that it complies with legal standards.
- Avoid Services Advertising Illegal Activities: Steer clear of services that explicitly promote themselves for illegal purposes.
- Be Cautious with High-Risk Services: Exercise caution when dealing with cryptocurrency services known to be utilized by criminals for laundering funds.
The FBI emphasizes that registration on the MSB Registrant Search web page does not imply a government endorsement or validation of the business’s legitimacy. It is crucial for users to conduct their own due diligence before engaging with any cryptocurrency money transmitting service.
