Treasury Secretary Janet Yellen announced that US federal regulations are in line with the Financial Action Task Force (FATF) crypto guidance; this means that non-custodial assets that cannot be easily categorized will not bear the transaction reporting burden.
Yellen’s comments came in written response ahead of today’s session of the Senate Banking Committee. According to him, those who do not provide custody services may not be subject to these standards.
Under its guidance, the FATF called on governments to hold those behind decentralized finance (DeFi) protocols accountable to anti-money laundering standards, including the collection and transmission of user information during transactions. However, the FATF clarified that the agency does not recommend regulating software, rather that governments should identify individuals or businesses that can be held accountable.
In light of this, Senator Pat Toomey asked whether non-custodial services would be subject to money service business registration. In response, it was stated that those who provide ancillary services such as hardware wallet manufacturers, unhosted wallet providers, software developers and miners are excluded from the definition of virtual asset service provider.
Yellen acknowledged these statements in her responses today: