In recent years, federal regulatory authorities in the United States have promulgated a number of policies related to the treatment of cryptocurrency transactions, investment profits, payment services, and other digital asset-related activities. Despite the difficulties in finding a consistent legal approach at the state level, the United States continues to make progress in preparing federal cryptocurrency legislation.
The Financial Crimes Enforcement Network (FinCEN) does not recognize cryptocurrencies as legal tender but considers cryptocurrency exchanges to be money transmitters on the basis that cryptocurrency tokens belong to other values that substitute for currency. Besides, the Internal Revenue Service (IRS) defines cryptocurrency as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value” and has issued tax guidance accordingly.
In the United States, cryptocurrency exchanges are lawful and regulated under the Bank Secrecy Act (BSA). In reality, this means that the providers of cryptocurrency exchange services must obtain the requisite license from FINCEN, establish an AML/CFT and Sanctions program, keep proper records, and submit reports to the authorities. Simultaneously, the U.S. Securities and Exchange Commission (SEC) has stated that it considered cryptocurrencies as securities and applied securities rules to digital wallets in a comprehensive manner that will affect both exchanges and investors. The Commodities Futures Trading Commission (CFTC), on the other hand, has taken a “do no harm” stance, recognizing Bitcoin and Ethereum as commodities and enabling public transactions for other virtual and cryptocurrency derivatives on the exchanges that are regulated or overseen by this agency.
Cryptocurrency exchanges like Coinbase (COIN) are legal in the United States. They are governed by the Bank Secrecy Act (BSA), which controls the activities of financial institutions and payments transmitters. To comply with this law, crypto exchanges must perform Anti-Money Laundering and Know-Your-Customer programs. Additionally, these exchanges are required to provide the regulators with pertinent information and obtain a license from The Financial Crimes Enforcement Network, as well as payment transmitter licenses from the states where they are operating.
To ensure effective consumer protection and more streamlined regulatory oversight, the Justice Department continues to enter into cooperation with the SEC, CFTC, and other authorities over future crypto regulations. Accordingly, the system of regulations is expected to be soon completed and come into effect, creating a strong foundation for crypto to get new highs. In addition, the formation of these regulations is also an important factor attracting investment from those who are interested in participating in this market in the US in particular and other countries in general.
DIPO model of LiveTrade is developed on the basis of adhering to SEC regulations to ensure the best interests of investors. This is a solution to help small and medium-sized businesses (SMBs) in acquiring quick and easy capital by applying blockchain technology. Accordingly, tokens issued through DIPO for fundraising still conform to these regulations to reduce risks for investors. The LiveTrade team is constantly perfecting our model to create better investment opportunities for investors interested in the digital asset market.