The Financial Crimes Enforcement Network (FinCEN) has announced that it will soon propose new crypto regulations affecting digital currency holdings at foreign exchanges. This proposal is separate from the one FinCEN recently proposed on cryptocurrency wallets. The U.S. Department of the Treasury bureau issued a notice on Thursday regarding a new filing requirement for cryptocurrencies. The regulator noted, “Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account.”
FBARs will need to be filed for non-US virtual currency accounts.
The FinCEN notice adds that the bureaus “intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account.” Shehan Chandrasekera, the Head of Tax Strategy at Cointracker, explained that “FBAR is a form you file with your tax return if you have any foreign financial assets over 10K at any time of the year.” He further clarified, “There are no taxes to be paid with this form, just additional disclosure.” Marc Boiron, attorney at Manatt, commented on the proposed regulations saying, “Goodbye non-US exchanges … FBARs will need to be filed for non-US virtual currency accounts.”
FinCEN also proposed new regulations for crypto-wallets.
As reported earlier, U.S. FinCEN proposed a 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.” The proposed rule, entitled “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets,” would subject self-hosted wallets to heightened anti-money laundering (AML) standards if enacted, meaning anonymous transacting could become a thing of the past.