FinCEN, the US Department of the Treasury’s (Financial Crimes Enforcement Network) has distributed direction on how to approach convertible virtual currencies (CVCs), in light of enquiries raised by many authorities. Regulators, law enforcement and financial institutions have all reportedly been in touch to receive clarification on virtual currencies.
It has additionally issued a warning to financial institutions and service providers on recognising and reporting suspicious activities identified with illegal use of CVCs for the following tax avoidance strategies in the following forms:
Avoidance of sanctions.
The use of ‘Darknet’ e-commerce marketplaces.
Distributed peer lending exchangers.
Providing unregistered cash service businesses.
Other unlawful financing.