Key Points

References

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US Financial Regulations and Concepts

IRS

EID

SSN

FDIC

FDIC DIF reserve ratio < 2%

https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund/dif-fund.html

The Federal Deposit Insurance Act (FDI Act) requires that the FDIC Board of Directors (Board) designate a reserve ratio for the Deposit Insurance Fund (DIF or fund) and publish the designated reserve ratio, or DRR, before the beginning of each calendar year. The Board must set the DRR in accordance with its analysis of the following statutory factors:

SEC

FINCEN. Financial Crimes Enforcement Network

KYC laws

AML laws

The Travel Rule on Identity

https://www.niceactimize.com/blog/aml-what-is-the-travel-rule-and-how-does-it-apply-to-crypto/

The ‘Travel Rule’ was first introduced by FinCEN in the US’s Bank Secrecy Act (BSA) and came into effect in the US on May 28, 1996. FinCEN’s ‘Travel Rule’ required financial institutions to pass on certain information to the next financial institution during the ‘transmittal of funds,’ which often refers to wire transfers. In 2012, the Financial Action Task Force (FATF) updated their FATF 40 recommendations to include similar ‘Travel Rule’ guidelines for wire transfers, as outlined in Recommendation 16.

The FATF adopted changes in 2018 to expressly clarify that their Recommendations apply to financial activities involving virtual assets. Subsequently, FATF published its initial guidance on applying a Risk-Based Approach (RBA) to virtual assets and virtual asset service providers, which was later updated in October 2021.

https://www.fincen.gov/sites/default/files/advisory/advissu7.pdf

A Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]—often called the “Travel” rule—requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution. This rule became effective May 28, 1996 and was issued by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This rule was issued by FinCEN concurrently with the new BSA recordkeeping rules [31 CRF 103.33(e) and (f)) for funds transfers and transmittals of funds]. The funds transfer rules are designed to help law enforcement agencies detect, investigate and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through funds transfer systems. The attached guidance is intended to answer general, basic questions concerning the implementation of the new regulations. It is not meant to be comprehensive and does not replace or supersede the regulations. These questions and answers and the Travel rule should be examined in concert with the Treasury’s related recordkeeping rule concerning the transmittal of funds

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