Banking Secrecy Act (BSA)


The Bank Secrecy Act (BSA) was implemented in the United States in 1970 to prevent criminals from concealing or laundering their illegal gains.

What Is Banking Secrecy Act (BSA)?

Also known as the Currency and Foreign Transactions Reporting Act, the Banking Secrecy Act (BSA) requires banks and other financial institutions to disclose records such as currency transaction statements and financial history of accounts to regulated authorities. When the account holders of banks engage with money transfers involving amounts over $10,000, documentation and verification become a pressing need. Authorities are able to detect and prevent money laundering, thanks to the Bank Secrecy Act.
The legislation does not mandate that all the transactions worth more than $10,000 be recorded. Per the Internal Revenue Service, every individual in a trade or company who gets more than $10,000 only in cash from a single purchase is required to submit ‘’Form 8300’’. This might be the outcome of a single transaction or a series of linked transactions. An individual, a firm, a corporation, a partnership, an association, a trust, or an estate may be subject to the regulation.
The rule dictates that by the 15th day after the cash transaction is made, ‘’Form 8300’’ must be submitted to the relevant authorities. This requirement applies to any portion of the monetary transaction that takes place in the United States, its possessions, or territories.

There are a number of exclusions in the law that do not need such assessment. Exempt parties include government departments or agencies, as well as corporations listed on major North American exchanges.

While the BSA has been praised for its effectiveness in combating illegal behavior, it has been criticized for the lack of rules that specify what exactly is considered as ‘suspect transaction’. To acquire access to the information, law enforcement authorities do not need a court order.
The rising popularity of cryptocurrencies has prompted debates on whether and how firms dealing with transactions utilizing new financial vehicles, such as bitcoin and altcoins, should be obliged to comply with the Bank Secrecy Act.
For some, the amount of secrecy that virtual, encrypted transactions accompany is the most appealing aspect of cryptocurrencies. Unfortunately, on the flip side of the coin, the ability to perform untraceable transactions and keep crypto coins in “wallets” rather than banks have made virtual currency an appealing tool for criminals and launderers to carry out unlawful operations.
The federal government has made efforts to provide greater control and visibility to bitcoin transactions as a result of an increase in the usage of cryptocurrencies for illegal activities.

Companies and individuals who are operating in the grey area of the law and are not clear about their position as money transmitters, will undoubtedly be unsure of their legal obligation to submit their data to the federal authorities. 

The first step for organizations and people who find themselves in difficult and unclear legal circumstances involving cryptocurrencies and the Bank Secrecy Act is to contact a white-collar defense attorney who has an expertise in virtual currency cases. Laws governing cryptocurrency are always changing. As a result, legal concerns arising from digital currency transactions necessitate the aid of an attorney with both technical subject-matter knowledge of how cryptocurrencies operate and their legal status.