Important Organizations and Laws around Cryptocurrency

A list of the organizations and laws that hold responsibility for policy creation and/or enforcement around Cryptocurrency.

IRS (Internal Revenue Service):

We all know there's only two guarantees in life, death and taxes. 

IRS Stance on crypto: "This is not a currency, and is not Real Property. This is something we don’t know exactly what to do with it, but we want our piece, soooooo, everytime you exchange it, swap it, trade it, we’ll consider that a taxable event you must report to us at the end of the year." IRS reminds taxpayers to report virtual currency transactions

SEC (Securities and Exchange Commission):

The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

Stance on crypto: if it quacks like a duck, and it looks like a duck, it is a duck. Cryptos and tokens are securities and they must follow by the same rules we have in place… or you are going to jail.

CFTC (Commodities Futures Trading Commission):

The U.S. Commodity Futures Trading Commission is an independent agency of the US government created in 1974, that regulates futures and option markets.

Stance of crypto: we love crypto, and people betting on futures market. Bring the house down… after you read what the guys at the SEC have to say… but after that, please bet on this all you want, we don’t care… actually we do, we want you to do it!

FinCEN (Financial Crimes Enforcement Network): 

FinCEN is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat domestic and international money laundering, terrorist financing, and other financial crimes.

Stance on crypto: “The term “virtual currency” refers to a medium of exchange that can operate like currency but does not have all the attributes of “real” currency, as defined in 31 CFR § 1010.100(m), including legal tender status. CVC is a type of virtual currency that either has an equivalent value as currency, or acts as a substitute for currency, and is therefore a type of “value that substitutes for currency.” 

As mentioned above, the label applied to any particular type of CVC (such as “digital currency,” “cryptocurrency,” “cryptoasset,” “digital asset,” etc.) is not dispositive of its regulatory treatment under the BSA. Similarly, as money transmission involves the acceptance and transmission of value that substitutes for currency by any means, transactions denominated in CVC will be subject to FinCEN regulations regardless of whether the CVC is represented by a physical or digital token, whether the type of ledger used to record the transactions is centralized or distributed, or the type of technology utilized for the transmission of value."
FinCEN Guidance - 1.3. Convertible Virtual Currency (CVC)

GTO (Geographic Targeting Order):

The FinCEN enforces a Geographic Targeting Order (“Order”) requiring title insurance
company to collect and report information about the persons involved in certain residential real
estate transactions. 

All-cash transactions exceeding $1 million in Miami-Dade, Broward and Palm Beach Counties, are reported by title companies and MSBs to FinCEN with an identification of the “beneficial owner” behind the transaction. 

Other areas of the country like the NYC boroughs, Los Angeles, San Francisco and San Diego are also part of the GTOs. 

Geographic Targeting Order Document

FINRA (Financial Industry Regulatory Authority): 

FINRA is dedicated to investor protection and market integrity through effective and efficient regulation of broker-dealers. FINRA is not part of the government. We’re a not-for-profit organization authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. 

They enforce FINRA Rules, CFTC Rules, and SEC Rules, and impose fines on those in violation.

OCC (Office of the Comptroller of the Currency):

The OCC charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks. The OCC is an independent bureau of the U.S. Department of the Treasury.

FIRPTA (The Foreign Investment in Real Property Tax Act): 

FIRPTA is a tax law that imposes U.S. income tax on foreign persons selling U.S. real estate. Under FIRPTA, if you buy U.S. real estate from a foreign person, you may be required to withhold 15% of the amount realized from the sale. The amount realized is normally the purchase price.

Note: FIRPTA has no relevance to crypto or Realdax’s services (only foreigners selling, not buying)

MSB (Money Services Business):

An MSB is generally any person offering check cashing; foreign currency exchange services; or selling money orders, travelers’ checks or pre-paid access (formerly stored value) products; for an amount greater than $1,000 per person, per day, in one or more transactions. A person who engages as a business in the transfer of funds is an MSB as a money transmitter, regardless of the amount of money transmission activity.

Every MSB must register with FinCEN by electronically filing FinCEN Form 107, Registration of Money Services Business, unless a person or business is only an MSB because they serve as an agent of another MSB.

BSA (Bank Secrecy Act): 

The Bank Secrecy Act (BSA), also known as the Currency and Foreign Transactions Reporting Act, is legislation passed by the United States Congress in 1970 that requires U.S. financial institutions to collaborate with the U.S. government in cases of suspected money laundering and fraud.

QI (Qualified Intermediary):

IRC §1441 et seq. regulates the withholding of income taxes from payments of U.S. source income made to a non-U.S. person. Generally, the U.S. payor must verify the Tax Identification Number (TIN) of its payees and withhold 30% of this payment if a TIN is not presented. A §1441 Qualified Intermediary (QI) is generally a foreign bank or other foreign financial institution that signs an agreement with the Internal Revenue Service (IRS).

Note: QI has no relevance to crypto or Realdax’s services.

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