Application of FinCEN’s Regulations to Virtual Currency Software Development and Certain Investment Activity Part II Summary

Updated 12/27/2021

This tool summarizes FinCEN’s ruling regarding a company that will produce software to automate the collection of the virtual currency and the payment in legal tender, and then purchase the virtual currency for its investment purposes. The following are the key takeaways of the ruling:

1. The production and distribution of software alone does not constitute acceptance and transmission of value.

2. As part of the analysis of whether a person is a money services business (MSB), you must identify the role the person is playing: (1) exchanger, (2) administrator; or (3) user. For more on these labels, see

3. Purchasing and selling convertible virtual currency (CVC) exclusively as investments for one’s own account is not engaging in the business of exchanging CVC for currency of legal tender for other persons.

4. If a company is providing these services for another person, then the company would be considered an MSB.

5. Any transfers by the user to third parties at the behest of sellers, creditors, owners, or counterparties will be heavily scrutinized.

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