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What is and is not considered a Money Service Business (MSB) operating within the U.S.? The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury has made a ruling. You can read it here.

Just like most government issued documentation, it is hazy and leaves a lot open for interpretation. I am not a lawyer, but I do have an opinion on what they are defining as an MSB operating in the U.S.

• The company exchanges U.S. dollars for U.S. clients to other currencies.
• The company holds U.S. dollars for U.S. clients in an account for banking services or services similar to a bank.
• Currency refers to fiat currencies (issued by governments) and not precious metals, like gold.
• It doesn’t matter if the MSB is located in the U.S. or in another country, as long as they have U.S. clients.

In addition, I conclude the following from my interpretation:

• E-gold, eBullion, and any other precious metal companies that are self-contained are exempt, because they do not deal directly with fiat currencies, including the U.S. dollar.
• Exchange sites that are strictly for use with precious metal companies are exempt, because their purpose is to purchase or sell precious metals for their U.S. clients and not for money transmission.
• Sites that deliver a product, service or receive a loan are exempt, because they are not performing banking services.
• Payment and payroll processors, like TSMC, CEPTrust, AlertPay, AsianPay, etc. are MSBs with U.S. clients, because they accept and send U.S. dollars in the form of transfers, checks, bank wires, credit/debit cards, etc., for banking services. These companies should be registered with the FinCEN.

Ok, folks, if you know of a lawyer or government agent that can interpret this ruling, please speak up. Also, if you read this differently and have a different interpretation, please let us know your opinion. (It would help if you cite the words in the ruling that determine your interpretation.)

Disclaimer: Because I am not a lawyer or a government agent, the above is only my opinion of one possible interpretation. For an exact interpretation, please seek legal counsel and/or help from the FinCEN. I am not responsible for you taking my interpretation and using it as your own opinion.

JMO - Sharon

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