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I found an article that might be interesting to some: it seems a couple months ago, one Larry Harmon, the operator of a Bitcoin mixing service called Helix, was fined $60 million for various violations of FinCEN's anti-money-laundering regulations:
Press release: https://www.fincen.gov/news/news-re...d-fincen-violating-anti-money-laundering-laws
Decision: https://www.fincen.gov/sites/defaul...HarmonHelix Assessment and SoF_508_101920.pdf
Harmon's also on trial in federal court for various charges arising from operating Helix - an opinion issued in this case points heavily toward this being an open-and-shut conviction. The guy also lost 160 BTC to civil forfeiture.
Opinion: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2019cr0395-59
The legalese in these decisions is not particularly interesting, but the upshot is that as far as the US government is concerned, Bitcoin is "money" for the purposes of the various laws and regulations surrounding "money transmitters", and a Bitcoin tumbler qualifies as a money transmitter. From there, it's easy to conclude that FinCEN registration is required, KYC/AML regulations apply, and obviously this anonymous service was not doing any of that.
The FinCEN decision lists a few dozen instances of Helix itself transacting with various darknet markets, but they don't make it clear to what extent they can trace this back to people on the purchasing end.
The 2019 regulatory opinion they link from the press release is also interesting, as it describes who they think should be subject to these regulations:
In short: almost everyone, other than individuals using crypto to make purchases for themselves, and mining pools. Section 4.5.3 on "anonymity-enhanced CVCs" seems to imply that you can't legally operate a "money transmitter" dealing in coins like Monero unless you figure out a way to trace the transactions and dox both sides.
Press release: https://www.fincen.gov/news/news-re...d-fincen-violating-anti-money-laundering-laws
Decision: https://www.fincen.gov/sites/defaul...HarmonHelix Assessment and SoF_508_101920.pdf
Harmon's also on trial in federal court for various charges arising from operating Helix - an opinion issued in this case points heavily toward this being an open-and-shut conviction. The guy also lost 160 BTC to civil forfeiture.
Opinion: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2019cr0395-59
The legalese in these decisions is not particularly interesting, but the upshot is that as far as the US government is concerned, Bitcoin is "money" for the purposes of the various laws and regulations surrounding "money transmitters", and a Bitcoin tumbler qualifies as a money transmitter. From there, it's easy to conclude that FinCEN registration is required, KYC/AML regulations apply, and obviously this anonymous service was not doing any of that.
The FinCEN decision lists a few dozen instances of Helix itself transacting with various darknet markets, but they don't make it clear to what extent they can trace this back to people on the purchasing end.
The 2019 regulatory opinion they link from the press release is also interesting, as it describes who they think should be subject to these regulations:
In short: almost everyone, other than individuals using crypto to make purchases for themselves, and mining pools. Section 4.5.3 on "anonymity-enhanced CVCs" seems to imply that you can't legally operate a "money transmitter" dealing in coins like Monero unless you figure out a way to trace the transactions and dox both sides.
