U.S. Signals Greater Oversight of Blockchain Businesses — The Information

Companies building applications that use blockchain technology might be subject to stringent regulations that could put a dent in their business models. The U.S. Financial Crimes Enforcement Network, a bureau of the Treasury Department, released guidance today specifying that any application that “accept[s] and transmit[s] currency, funds, or value that substitutes for currency” would qualify as money transmitters under the Bank Secrecy Act, a 1970 law that requires financial institutions to work with the U.S. government to fight money laundering and fraud.

Many U.S.-based cryptocurrency exchanges like Coinbase have long complied with those regulations by requiring their customers to verify their identities before using their service, as well as other processes that require expensive teams of lawyers and engineers to maintain. According to FinCEN’s new advisory, smaller companies creating games or services that make use of blockchain might be required to have similar processes in place.

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