FinCEN

FinCEN (Financial Crimes Enforcement Network) is a bureau of the US Department of the Treasury responsible for enforcing the Bank Secrecy Act and related anti-money-laundering statutes. It sets the federal rules that US-based crypto businesses must follow.

FinCEN's 2013 guidance was a defining moment for Bitcoin in the US: it classified administrators and exchangers of virtual currency as Money Services Businesses (MSBs), bringing them under the same registration, recordkeeping, and reporting regime as remittance companies and check cashers. Major obligations include:

• MSB registration with FinCEN itself.
• State money-transmitter licensing in each state the business serves (separate from federal, often more burdensome in aggregate).
• AML program with appointed compliance officer, documented procedures, employee training, independent reviews.
• Customer identification (KYC) at account opening above de minimis thresholds.
• Suspicious Activity Reports (SARs) filed for transactions that look suspicious by FinCEN's published criteria.
• Currency Transaction Reports (CTRs) for cash transactions above $10,000 (the threshold hasn't moved since 1970 despite decades of inflation).

What FinCEN's regime does not cover: self-hosted wallets, peer-to-peer transactions between individuals, the protocol itself. A 2020 proposal by the outgoing Trump administration tried to extend KYC obligations to "unhosted wallets" but was withdrawn after extensive industry pushback. The status quo: the protocol stays unregulated; the on-ramps and off-ramps carry the compliance burden.

For an individual Bitcoiner the practical effects are: any US-based exchange you use is filing reports with FinCEN about your activity; transactions above certain thresholds are reviewed; your KYC data is subpoenable. None of that touches your self-custodied coins, but it's the surveillance backdrop most US Bitcoiners operate against.