United States Minor Outlying Islands

## Report on Retail Cryptocurrency Trading Status in United States Minor Outlying Islands

**Date:** 2025-06-26

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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### Retail_Trading_Status in United States Minor Outlying Islands

**Identified Status:** Unclear

**Detailed Narrative Explanation:**

The United States Minor Outlying Islands (USMOI) are a statistical designation comprising nine insular areas of the United States, including Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Atoll, Navassa Island, Palmyra Atoll, and Wake Island. These territories are largely unincorporated and unorganized under U.S. sovereignty, with no permanent resident civilian population; temporary inhabitants include military personnel, scientific researchers, or U.S. Fish and Wildlife Service staff.

Legally, the USMOI fall under U.S. federal law, meaning that cryptocurrency regulations from agencies like FinCEN, SEC, CFTC, and IRS technically apply. FinCEN treats cryptocurrency exchanges as Money Services Businesses (MSBs) requiring AML/CFT compliance and KYC under the Bank Secrecy Act. The SEC regulates crypto securities, the CFTC oversees commodities like Bitcoin, and the IRS treats cryptocurrency as property for tax purposes. However, the status of retail trading is 'Unclear' due to practical inapplicability. The absence of a permanent civilian population means there are no retail traders to regulate. Furthermore, the islands lack local economies, banking systems, and reliable internet infrastructure, with connectivity often limited to satellite or military networks that may block trading sites. Any potential activity by temporary residents would depend on mainland U.S. banking for fiat transactions, but the fundamental lack of population and infrastructure renders the regulatory framework moot. Thus, while U.S. law permits regulated crypto trading, the practical reality in the USMOI makes the status ambiguous and best classified as 'Unclear.'

**Specific, Relevant Text Excerpts and URL Links:**

1.  **Applicability of U.S. Law to Territories:**
    *   **Source:** Federal Acquisition Regulation; Geographic Use of the Term 'United States'
    *   **Excerpt:** "The rule removes the definition of 'possessions' and adds a new definition of 'outlying areas'... that includes... the minor outlying islands of the United States."
    *   **URL:** https://www.federalregister.gov/documents/2001/07/27/01-18654/federal-acquisition-regulation-geographic-use-of-the-term-united-states
    *   **Date:** 2001-07-27

2.  **FinCEN's Stance on Cryptocurrencies:**
    *   **Source:** FinCEN Guidance on Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
    *   **Excerpt:** "The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies."
    *   **URL:** https://www.fincen.gov/sites/default/files/shared/FIN-2013-G001.pdf
    *   **Date:** 2013-03-18

3.  **IRS Treatment of Virtual Currencies:**
    *   **Source:** IRS Notice 2014-21
    *   **Excerpt:** "For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency."
    *   **URL:** https://www.irs.gov/pub/irs-drop/n-14-21.pdf
    *   **Date:** 2014-04-14

4.  **General Information on USMOI:**
    *   **Source:** Wikipedia: United States Minor Outlying Islands
    *   **Excerpt:** "Except for Palmyra Atoll, all of these islands are unincorporated unorganized territories of the United States... federal U.S. laws apply."
    *   **URL:** https://en.wikipedia.org/wiki/United_States_Minor_Outlying_Islands
    *   **Date:** 2025-12-10

5.  **Context on Crypto Policy:**
    *   **Source:** Global Crypto Policy Review Outlook 2025/26 Report
    *   **Excerpt:** "Major federal legislation passed on stablecoins in 2025 with comprehensive market structure up next."
    *   **URL:** https://www.trmlabs.com/policy
    *   **Date:** 2025-12-03

In summary, the United States Minor Outlying Islands have no independent cryptocurrency regulatory framework, and while U.S. federal law technically applies, the lack of permanent population and essential infrastructure makes the retail trading status 'Unclear.'