SVET Rating News Update (9–16 Feb, 2020)

2 min readFeb 17, 2020


The top news of the week is a no-brainer.

At Wednesday Treasury Secretary Steven Mnuchin said: “We will not allow digital asset service providers to operate in the shadows and will not tolerate the use of cryptocurrencies in support of illicit activities … To be clear: FinCEN will hold any entity that transacts in Bitcoin, Libra, or any other cryptocurrency to its highest standards.”

So, what are those “highest standards” and “entities” and when Mnuchin might hit us with that? Of course, at this stage it’s impossible to know for sure answers to those questions. However, we still can speculate a bit on this issue, because, we do have numerous precedents.

There’s a little doubt that the Financial Crimes Enforcement Network (or FinCEN — a bureau of the U.S. Department of the Treasury) will use the Bank Secrecy Act’s (BSA) to implement policies and procedures applicable to brokers / dealers in securities as well as to, so-called, money-transmitters.

Currently those “policies” include the following:

- AML and KYC programs;
- “suspicious activity” reporting;
- reporting transactions exceeding $10000 (it might be much lesser limits for crypto);
- “travel rule”;
- full compliance with data requests from law enforcers;
- enhanced due diligence and maintaining records for non-US persons;
- prohibition on correspondent accounts for foreign shell banks;
- compliance with any other special measures imposed by FinCEN.

Will “entities”, mentioned by Mnuchin, incorporate only the “low hanging fruits” such as crypto-exchanges and banks, dealing with crypto, or this term will also include all companies issuing / dealing with crypto as well as wallets providers, miners and, even, individual hodlers is an open question.

If it does, then it might push most DLT businesses (specially those with small or no-budgets) out of the USA market due to astronomical costs of those “compliances”. It might also significantly reduce the number of crypto-currencies which US citizens / residents can legally transact with.

In fact, govs bureaucrats might, as usual, decide to make their own life easier at our expense and cut the list of brokers / dealers to few “certified” ones letting everybody else to deal with that new artificially created monopoly (think NY State Department of Financial Services (NYSDFS) issued “BitLicence”).

As to the D-Day, choosing it might involve election politics for Mnuchin and his squad. Will it be before or after Tuesday, November 3, 2020, probably, depends on whether politicians come to a conclusion that soothing national security ‘hawks’ is more (less) important than infuriating business-as-usual orientated ‘doves’.


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