FBI warns Americans against using unregistered crypto money transmitters

The U.S. Federal Bureau of Investigation has warned Americans against using unregistered crypto money transmitting services.

Americans should avoid crypto services from firms that are not registered as Money Services Businesses (MSBs) under federal law and do not follow anti-money laundering rules, according to a Thursday statement from the FBI’s Internet Crime Complaint Center (IC3).

“A few simple steps can prevent unintentional use of non-compliant services,” the FBI wrote in the release. “For example, avoid cryptocurrency money transmitting services that do not collect know your customer (KYC) information from customers when required.”

KYC information commonly includes name, date of birth and address among other details.

The FBI also suggested users look up whether a business is registered as a Money Services Business using a tool from the U.S. Financial Crimes Enforcement Network (FinCEN). When The Block used the tool, crypto firms such as Coinbase and Kraken (legally known as Payward Financial Inc) appeared.

“The FBI has recently conducted law enforcement operations against cryptocurrency services which were not licensed in accordance with federal law,” according to the statement. “People who use unlicensed cryptocurrency money transmitting services may encounter financial disruptions during law enforcement actions, especially if their cryptocurrency is intermingled with funds obtained through illegal means.”

The FBI also warned users against using crypto services that do not ask for KYC information, such as name or address, before letting you send or obtain cryptocurrency. It adds that apps in an app store may not necessarily be following federal compliance requirements or facilitating legal services.

“Cryptocurrency money transmitting services that purposely break the law or knowingly facilitate illegal transactions will be investigated by law enforcement,” the FBI release adds. “Using a service that does not comply with its legal obligations may put you at risk of losing access to funds after law enforcement operationsthose businesses.”

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