The Federal Bureau of Investigation (FBI) has warned Americans against using unregistered cryptocurrency transfer services.
Americans should avoid cryptocurrency services from companies that are not registered as money service businesses (MSBs) under federal law and do not follow anti-money laundering regulations, according to a statement released Thursday by the FBI’s Internet Crime Complaint Center (IC3). They say it shouldn’t be done.
“Taking a few simple steps can help prevent unintended use of non-compliant services,” the FBI wrote in a release. “For example, avoid cryptocurrency transfer services that do not collect customer information (KYC) Obtain information from customers when necessary.”
KYC information typically includes name, date of birth, address, etc.
The FBI also suggested that users use a tool from the Financial Crimes Enforcement Network (FinCEN) to check whether a business is registered as a financial services business. When The Block used this tool, cryptocurrency companies like Coinbase and Kraken (legally Payward Financial Inc) emerged.
“The FBI recently conducted law enforcement operations against cryptocurrency services that are not licensed under federal law,” the statement said. “People who use unlicensed cryptocurrency transfer services may face financial disruption during law enforcement proceedings, especially if cryptocurrency is mixed with funds obtained through illicit means.”
The FBI also warned users not to use cryptocurrency services that do not ask for KYC information, such as name or address, before sending or obtaining cryptocurrency. Apps in the App Store may not necessarily follow federal compliance requirements or facilitate legal services, he added.
“Cryptocurrency money transfer services that knowingly violate the law or knowingly facilitate illegal transactions will be investigated by law enforcement,” the FBI added. “Using services that do not comply with their legal obligations puts them at risk of losing access to their funds after law enforcement targets them.”
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About the author
MK Manoylov has been a reporter for The Block since 2020, joining just before Bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for publications covering all cryptocurrency-related news, preferring NFTs, metaverse, web3 games, fundraising, crime, hacking, and cryptocurrency ecosystem stories. MK holds a graduate degree from New York University’s Science, Health, and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. X You can follow MK at @MManoylov and on LinkedIn.