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Mt. Gox registers with FinCEN as a money services business

Saturday 29th, June 2013 / 10:21

Mt. Gox, the world’s largest bitcoin exchange, has taken a step towards complying with US money-laundering regulations by registering as a money services business with the US Treasury Department.

The Treasury Department’s Financial Crimes Enforcement Network, FinCEN, shows on their website that Mt. Gox’s registration as a money services business was received on Thursday 27th June.

Although the registration does not constitute approval by FinCEN of Mt. Gox’s activities, it is a sign that the bitcoin exchange is willing to abide by US rules in order to continue operating.

FinCEN issued guidelines applying traditional money-laundering rules to virtual currencies in March amid concerns over the involvement of virtual currencies in money laundering. FinCEN stated that virtual currency exchanges must register with them as money transmitters and must comply with anti-money-laundering regulations. Although bitcoin was not mentioned by name in the guidelines, it was clearly implicated by mention of “decentralised virtual currencies”.

In May, the Department of Homeland Security seized funds from an account held by a Mt. Gox subsidiary in US-based online payment network Dwolla, when it was discovered that Mt. Gox CEO Mark Karpeles never registered the company or its subsidiary in the US as a money transmitter. Dwolla was consequently forced to stop all transactions with Mt. Gox.

Just two weeks ago, Mt. Gox halted US dollar withdrawals, claiming the necessary improvement of technical processes. The exchange has been plagued recently by downtime issues and is suffering a general lowering of user confidence, to the extent that bitcoin payment processor BitPay announced that it has temporarily stopped using Mt. Gox to determine its bitcoin exchange rates.

Mt. Gox was processing 80% of all bitcoin transactions earlier this year, but now accounts for just 54%.

In an earlier sign of compliance with anti-money-laundering regulations, Mt. Gox announced in May that it required users to verify their accounts to perform fiat currency withdrawals and deposits, and that they were doubling their verification staff in order to support a fast turnaround on verification approvals.

The FinCEN Money Services Business registration form lists MtGox Inc. as a Delaware company and states that it is a money transmitter.

Image credit: Flickr

The post Mt. Gox registers with FinCEN as a money services business appeared first on CoinDesk.

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