Removing Barriers Blog

Comments submitted to FinCEN re: CVC & LTDA
Posted January 04, 2021 by CUNA Advocacy

Today, CUNA submitted comments to the Financial Crimes Enforcement Network’s (FinCEN) regarding their Notice of Proposed Rulemaking on information collection and reporting requirements for certain transactions involving Convertible Virtual Currency (CVC) or Legal Tender Digital Assets (LTDA).

Specifically, this proposed rule would require compliance with recordkeeping and reporting requirements for certain suspect deposits, withdrawals, exchanges, or other payments or transfers of CVC or LTDA by, through, or to a bank or money service business that involve an “unhosted” wallet (a cybercurrency wallet that is not hosted by a third-party financial system) or an “otherwise covered wallet,” (a hosted wallet located in a jurisdiction designated by FinCEN as having anti-money laundering compliance problems, such as North Korea and Iran).  By in large, the recordkeeping requirements for these CVC and LTDA transactions are similar to existing rules for wire transfers over $3,000.  Similarly, the reporting requirements are similar to the Currency Transaction Report (CTR) rules in place for currency withdrawls over $10,000.

In our letter, we reiterated our general support for FinCEN’s anti-money laundering (AML) goals, but expressed our concerns that FinCEN dispensed with the normal notice-and-comment rulemaking requirements for this proposed rule and provided a shortened 15-day comment period during the holiday season.  Accordingly, we requested an extension to the comment period so credit unions and the Leagues can better evaluate the proposal and submit comments that would improve it. In addition, we specifically pointed out that exemptions related to currency should be carried over to CVCs and LTDAs and that any new requirements should not be fully implemented until credit unions can determine if they currently have the technological capabilities for collecting, tracking and reporting the requested information about counterparties.  The required information collection includes:

  1. The name and address of the financial institution’s customer;
  2. The type of CVC or LTDA used in the transaction;
  3. The amount of CVC or LTDA in the transaction;
  4. The time of the transaction;
  5. The assessed value of the transaction, in U.S. Dollars, based on the prevailing exchange rate at the time of the transaction;
  6. Any payment instructions received from the financial institution’s customer;
  7. The name and physical address of each counterparty to the transaction of the financial institution’s customer;
  8. Other counterparty information the Secretary may prescribe as mandatory on the reporting form for transactions subject to reporting pursuant to § 1010.316(b);
  9. Any other information that uniquely identifies the transaction, the accounts, and, to the extent reasonably available, the parties involved; and,
  10. Any form relating to the transaction that is completed or signed by the financial institution’s customer.

Please contact Damon Smith at dsmith@cuna.coop or 202-235-3390 with any questions.