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

Updated 12/27/2021

This tool summarizes FinCEN’s ruling regarding a company that mines Bitcoin. The following are the key takeaways of the ruling:

1. The mechanism by which the convertible virtual currency (CVC) is acquired is immaterial to the analysis of whether a company is an money services business (MSB).

2. As part of the analysis of whether a person is a MSB, you must identify the role the person is playing: (1) exchanger, (2) administrator; or (3) user.

3. A user that mines virtual currency and uses it for its own purposes and not for the benefit of others is not an MSB under FinCEN’s regulations.

4. A user’s conversion of virtual currency into legal tender or another CVC does not make the user 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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