Published on August 14th, 2015 | by bitcoin0
Commodity-Backed Token Services are Money Transmitters, FinCEN Declares
The Financial Crimes Enforcement Network (FinCEN) has issued a new ruling applicable to US businesses seeking to tokenize commodities for blockchain-based trading.
Under such business models, FinCEN suggests startups would need to be licensed in all 50 states.
The statement is the latest from FinCEN to clarify which types of US bitcoin services it considers money transmitters following similar declarations for bitcoin processors, escrow services and miners, among other groups.
In particular, FinCEN referenced a 2011 decision in which it carved out an exemption to entities that only provide “the delivery, communication, or network data access services used by a money transmitter to supply money transmission services”.
FinCEN further called back to 2008 guidance in which it stated that broker-dealers in commodities or currencies are money transmitters if they transfer funds between a customer and a third party that is not part of the transactions.