FinCEN proposes new KYC rules for crypto wallets

The U.S. Financial Crimes Enforcement Network (FinCEN) has released a proposed rule that would instill record keeping and reporting requirements for transactions by or to a bank or money service business involving an "unhosted or otherwise covered wallet."

If enacted, the proposed rule, entitled "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets," would subject transactions sent to self-hosted wallets and wallets held at financial institutions not subject to U.S. anti-money laundering (AML) law to heightened AML standards.

The rule calls for enhanced know-your-customer (KYC) requirements for withdrawals to unhosted wallets greater than $3,000. For transactions larger than $10,000, firms would have to report to FinCEN. It would require banks and MSBs to file information pertainin