The Financial Crimes Enforcement Network (FinCEN) has penalized a “peer-to-peer exchanger” for the first time for violating the Bank Secrecy Act’s (BSA) registration, program, and reporting requirements, FinCEN announced. According to the press release, Eric Powers never registered as a money services business, “had no written policies or procedures for ensuring compliance with the BSA, and failed to report suspicious transactions and currency transactions.”
“Obligations under the BSA apply to money transmitters regardless of their size,” said FinCEN Director Kenneth A. Blanco. “It should not come as a surprise that we will take enforcement action based on what we have publicly stated since our March 2013 Guidance—that exchangers of convertible virtual currency, such as Mr. Powers, are money transmitters and must register as MSBs. In fact, there were indications that Mr. Powers specifically was aware of these obligations, but willfully failed to honor them.”
Powers advertised his bitcoin trading online. He finalized transactions in person, by mail or by wire through a depository institution. Although he participated in suspicious transactions, for instance doing business on the dark web marketplaces, he never reported them.
Even though Powers carried out more than 200 transactions, he never filed a transaction report. Powers carried out about 160 purchases of bitcoin for approximately $5 million, and each of them necessitated a CTR, FinCEN wrote. Powers has received a $35,000 fine. FinCEN has also banned him from providing money transmission services.