FinCEN proposes a virtual-currency transfer prohibition involving A7 sub-agents

What changed

FinCEN released a section 9714 finding and proposed rule addressing A7 Network sub-agents. Proposed section 1010.668 would prohibit covered financial institutions from transfers involving listed sub-agents or their administered accounts and CVC addresses, expressly covering A7A5. It proposes counterparty notification, risk-based due diligence, and notification records. These proposed duties are not yet effective; existing OFAC restrictions remain separate.

Who it affects

• Covered financial institutions processing relevant transfers
• Digital-asset exchanges and custodians within the covered perimeter
• Advisers selecting stablecoin transfer providers

What is still open

• Final scope and adoption of the prohibition
• Federal Register publication and resulting comment deadline
• Identification of additional sub-agents and associated addresses

What it means for an advisor

• Map client stablecoin transfer routes to potential sub-agent exposure
• Assess provider readiness for proposed notification and screening duties
• Distinguish proposed FinCEN requirements from current OFAC obligations