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ARTICLE · 23 NOVEMBER 2018

FinCEN Adds Virtual Currency To High-End Real Estate Reporting Regime

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A perfect storm for AML risk can arise from (i) the use of legal entities to conceal ownership, (ii) the limited application of AML requirements to real estate transactions and (iii) the misuse of virtual currency...

United StatesTechnology
Thomas Delaney
Thomas Delaney
Alex Lakatos
Alex Lakatos
David Beam
David Beam
Matthew Bisanz
Matthew Bisanz
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The Perfect Storm

A perfect storm for AML risk can arise from (i) the use of legal entities to conceal ownership, (ii) the limited application of anti-money laundering ("AML") requirements to real estate transactions and (iii) the misuse of virtual currency to launder money. For example, (i) the US Financial Crimes Enforcement Network ("FinCEN") has explained that "[t]he misuse of shell companies to launder money is a systemic concern for law enforcement and regulatory agencies, but it is of particular concern in the 'all-cash' segment of the real estate market, which currently has fewer AML protections";1 (ii) the Financial Action Task Force ("FATF") has stated that "the [US] regulatory framework has some significant gaps," including "minimal coverage" of certain "institutions and businesses" such as real estate agents, lawyers, and "trust and company service providers";2 and (iii) FinCEN has identified that "virtual currency has the potential to be exploited

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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