Topic: Cryptocurrency
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Do you know if the recent amendments to the Illinois Revised Uniform Unclaimed Property Act (RUUPA) changed how we should handle dormant accounts?
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The Illinois RUUPA was recently amended by Public Act 102-288, signed into law on August 6, 2021. To summarize, the Public Act: Amends the definition of virtual currency, sets the presumed abandonment period for virtual currency as five years, and explains how virtual currency should be delivered to the Treasurer if abandoned. Shortens the presumed…
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A potential customer would like to open a deposit account with our bank to accept deposits made at a Bitcoin ATM that they own. We believe the customer is a money services business (MSB), and it would use a security service (like Garda or Brinks) to pick up the cash from the Bitcoin ATM and count the funds, which would then be sent to the customer’s account at our bank via ACH. Funds would flow out of the account by ACH transfer to a Bitcoin exchange. What BSA/AML concerns should we be aware of when considering whether to do business with this customer?
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We believe your bank should confirm that the customer is registered as an MSB and is licensed as a money transmitter under Illinois law and review the BSA/AML requirements for providing banking services to MSBs generally, as well as federal and state guidance on MSBs that transmit convertible virtual currency (CVC) such as Bitcoin. The…
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We have a potential client that would like us to finance the purchase of a Bitcoin ATM. We would not process any transactions for the client through our system, since they do not have a deposit account with us, and our client will engage a third party money services business (MSB) to do all of the actual payment processing associated with the Bitcoin ATM. Under the Bank Secrecy Act (BSA), what type of monitoring would be required for this client, and would the answer change if we begin a deposit relationship with the client?
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We do not believe that lending funds to a borrower for the purpose of purchasing a Bitcoin ATM would require your bank to perform the BSA-related due diligence required for an MSB, unless your customer is an agent of the MSB doing the actual payment processing for the Bitcoin ATM. Whether your bank’s lending relationship…
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Can an agent with a power of attorney (POA) use online banking to transact on a customer’s account?
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Yes, we believe that an agent with a valid POA (that is signed by your customer, notarized, and witnessed) may use online banking to transact on a customer’s account, but only if the POA authorizes the agent to execute financial institution transactions. Additionally, your bank may wish to require the agent to produce certain information…
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We have a potential customer who wants to open a business account for an investment club for virtual currency. The club currently has three members, and they would purchase virtual currency through Coinbase. Would the individual opening the account be considered an administrator of virtual currency? What if the individual opened a business account for the same purpose? Also, is the club a money services business (MSB)?
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We do not believe that the individual or business operating an investment club for virtual currency would be considered an “administrator” of virtual currency under FinCEN’s standards, but they might be an “exchanger” — which could qualify as an MSB, depending on the club’s activities. FinCEN has issued guidance defining an “administrator” of virtual currency…
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A son with power of attorney would like to have access to Online Banking for his father’s account. Is this legal in Illinois?
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Yes, this is legal in Illinois, provided that the son produces certain information, including the power of attorney document that grants him the authority to act on behalf of his father. The Revised Uniform Fiduciary Access to Digital Assets Act requires a custodian of an individual’s “digital assets” to provide access to an agent acting…