The Financial Crimes Enforcement Network, jointly with the Office of Foreign Asset Control, today proposed a new rule to establish BSA and sanctions compliance obligations for payment stablecoin issuers.
The proposed rule would implement the anti-money laundering/countering the financing of terrorism provision of the Genius Act, which established a regulatory framework for payment stablecoins. According to a summary of the 303-page rule, stablecoin issuers would be required to meet BSA obligations, including filing suspicious activity reports, creating and retaining certain records, and conducting due diligence. They also must maintain an effective sanctions compliance program.
In addition to meeting other BSA requirements, stablecoin issuers would also be required to have AML/CFT programs with the following features:
- Internal policies, procedures and controls to ensure BSA compliance. Such policies must include a risk assessment process, efforts to mitigate money laundering and terrorist financing risks, and ongoing customer due diligence.
- Independent testing of the issuer’s AML/CFT program. Issuers must also keep a written copy of the program that can be shared with FinCEN upon request.
- An AML/CFT officer who resides in the U.S.
- An ongoing employee training program.
The AML/CFT program requirements for stablecoin issuers mirror the proposed revisions to BSA requirements for banks and other financial institutions that FinCEN released on Tuesday. The rule also proposes a coordination function between FinCEN and primary federal stablecoin regulators prior to any supervisory action. Enforcement actions or major supervisory actions would be limited to cases where the issuer has a significant or systemic failure to maintain its program.
Comments on the proposal are due 60 days after publication in the Federal Register.
