In recent years, traditional financial institutions such as HSBC and BNP Paribas have been subject to multi-billion dollar fines for allegedly violating money-laundering standards.

Now the US Treasury Department has turned its sights on the virtual currency exchangers holding them to the same standards of transparency and accountability – which is the right approach.

Treasury announced this week a $700,000 penalty against Ripple Labs Inc., a virtual currency exchanger, and subsidiary XRP II for alleged violations of the Bank Secrecy Act.

Ripple Labs is the developer of a convertible virtual currency known as XRP, as well as systems for exchanging virtual currency payments.

The government alleged that Ripple Labs was operating a money services business and selling a virtual currency without following federal law governing financial institutions, such as implementing an anti-money laundering program or registering with the Treasury Department’s Financial Crimes Enforcement Network.

As virtual currencies continue to grow, it will become increasingly important that virtual currency exchangers and administrators operate with transparency and accountability. Regardless of whether the financial system is traditional or virtual, sunshine remains the best disinfectant for financial abuses and fraud.

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