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Folks have been asking about FinCEN's jurisdiction over peer-to-peer bitcoin or cryptocurrency exchangers in the wake of the recent civil penalty assessed against Eric Powers. As we wrote in 2017 It comes down to odd metaphysical musings about "location" in the digital age.

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Neeraj K. Agrawal

@NeerajKA

· Apr 22, 2019

How FinCEN’s definition of money transmission applies to “peer-to-peer” cryptocurrency exchange (from this report coincenter.org/entry/aml-kyc-)

Jesse Powell

@jespow

Replying to

@valkenburgh

They'd need to start regulating the transmission of information to be effective. You don't need to make a transfer on the blockchain to transmit value. The value is in knowing the location of the hidden treasure, i.e. the private key. It's enough that I tell you where to find it.

6:43 PM · Apr 22, 2019Twitter Web Client

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Peter Van Valkenburgh

@valkenburgh

Apr 22, 2019

Replying to

@jespow

exactly, it gets absurd pretty quickly. Regulators will tell you that's why they have a "facts and circumstances" exemption from money transmission classification. But that sounds like an arbitrary power to not enforce the law whenever it's disadvantageous to the regulator.