Targeting the currency mixing protocol? FBI warns against using encrypted transfer services of unregistered MSB companies, criticized for unclear definition

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The FBI is strongly urging Americans not to use cryptocurrency transfer services that are not registered as money services businesses (MSBs), according to a Thursday statement . However, the warning is widely believed to be directed at mixing protocols, which have recently come under regulatory scrutiny.

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FBI: Avoid using unlicensed crypto transfer services

The FBI warns that Americans should avoid using cryptocurrency services provided by companies that are not legally registered as a money services business (MSB) and do not comply with anti-money laundering rules:

The FBI recently conducted enforcement actions against unregistered crypto services and is reminding users of its cryptocurrency transfer services that their funds may be restricted during enforcement periods, especially if their cryptocurrencies are linked to money laundering activities.

It added, “Services that can send cryptocurrency without providing KYC information should also be avoided as such services may not be legal.”

It is reported that the MSB license is issued by FinCEN (U.S. Criminal Enforcement Agency). It only serves as a certification for a company registered with the government to implement anti-money laundering and anti-terrorism financing , but does not endorse or guarantee its products and investor protection.

Encryption services that intentionally violate the law or intentionally facilitate illegal transactions will be investigated by law enforcement agencies; and users who use related services may lose the funds invested in them after law enforcement actions.

Use the MSB license search tool: If you have any questions, search first

In addition, the FBI also provides FinCEN's MSB license query website , saying that if you have any doubts, you can search the service company name:

A few simple steps can prevent you from inadvertently using a non-compliant service.

Targeting cryptocurrency mixing protocol?

In response to the FBI’s warning, Cointelegraph quoted attorney Michael Bacina as expressing concerns about the crypto industry:

Perhaps it would be a good thing for investors to formulate appropriate cryptocurrency regulations and clear guidelines as soon as possible to replace law enforcement actions one after another.

And added, “Even though the warning is clearly aimed at recent cases of currency mixing protocols such as Tornado Cash, the warning is too broad and ignores many details of the operation of decentralized systems.”

Here, looking back at the law enforcement actions from various countries in recent months and years, the currency mixing agreement has been hit hard.

Is it dangerous not to be in MSB?

Bankless co-founder Ryan Sean Adams expressed doubts about the warning's vague definition of MSB on Twitter (now Apply for registration:

PSA issued by the FBI today is…eerie.
Don't use unregistered cryptocurrency money transmitting services btw if it's not in this database it's a no no…
oh and is your code or wallet a msb? maybe maybe not but we're arresting privacy devs right now & calling them msbs so… pic.twitter.com/mtL4oCrM81
— RYAN SΞAN ADAMS – rsa.eth 🦄 (@RyanSAdams) April 25, 2024

Don’t use unregistered cryptocurrency transfer services? So if it's not in this database, it won't work.

And said, "Is your code or wallet MSB? Maybe, maybe not, but we are currently arresting privacy protocol developers."

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.

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