FBI Issues Warning Against Unregistered Crypto Services Amid Privacy Concerns

The Federal Bureau of Investigation (FBI) has issued a warning urging Americans to steer clear of unregistered cryptocurrency money-transmitting services.

What Happened: This alert, primarily aimed at smart-contract-driven privacy tools, was part of a public service announcement on April 25, emphasizing the use of registered Cryptocurrency Money Services Businesses (CMSBs) that adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

The FBI’s announcement highlighted recent law enforcement actions against non-compliant cryptocurrency services.

These actions have reportedly targeted services operating outside federal regulatory frameworks, and the FBI warned that individuals using these services might face financial disruptions, especially if their funds are mixed with those obtained through illegal means.

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The legal landscape for cryptocurrency in the U.S. continues to grow more complex as evidenced by the recent arrests of Samourai Wallet co-founders Keonne Rodriguez and William Hill on charges of money laundering and operating an unlicensed money-transmitting business, facing up to 25 years in prison if convicted.

The definition of what constitutes a Money Services Business (MSB) remains a contentious issue.

Ryan Sean Adams, co-founder of Bankless, described the FBI's stance as "eerie," questioning the broad application of the MSB designation to various crypto services.

His concerns reflect a broader uncertainty about how code or crypto wallets might be treated under regulatory frameworks.

This regulatory uncertainty was underscored on the same day as Ethereum (CRYPTO: ETH) development firm Consensys filed a lawsuit against the SEC, accusing it of trying to “seize control over the future of cryptocurrency” by classifying Ether as a security through enforcement actions rather than through clear, purpose-built regulation.

What’s Next: These escalating tensions between crypto firms and regulators highlight the growing need for clear, functional regulatory frameworks—a topic that will be prominently discussed at the upcoming Benzinga’s Future of Digital Assets event on Nov. 19.

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