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One year after a dramatic spike in the price of Bitcoin, many cryptocurrency exchanges in the United States have registered as money services businesses, or MSBs, and upgraded their compliance efforts amid more frequent regulatory supervision and examinations.

Similar federal scrutiny may also extend to a smaller, but growing, corner of the industry: peer-to-peer services that allow users to trade their cryptocurrencies directly with each other without having to provide identification or otherwise enter their personal details, sources told ACAMS moneylaundering.com.

Some operate as centralized online platforms where users trade cryptocurrency for government banknotes, others employ decentralized software through which anonymous users swap different forms of cryptocurrency, such as bitcoins for litecoins.

A number of companies in each of those categories continue to question whether their “indirect” relationship to cryptocurrency transactions obligates them to register as MSBs with the Treasury Department in line with 2013 guidance, according to Chris Padovano, a New York-based attorney who runs the cryptocurrency blog Decentralized Legal.

The department’s Financial Crimes Enforcement Network, of FinCEN, has signaled interest in regulating a wide range of cryptocurrency firms. In an October 2014 administrative ruling, the bureau instructed one business to register as an MSB after the company disclosed plans to create a platform to match buyers and sellers of digital assets.

“Your analogy to the securities and futures industries … is not relevant for analysis of the company’s obligations under the BSA [Bank Secrecy Act],” FinCEN wrote. “The company is facilitating the transfer of value, both real and virtual, between third parties.”

FinCEN has responded forcefully to cryptocurrency-related compliance failures. In 2015, the bureau joined federal prosecutors in fining San Francisco-based Ripple Labs $700,000 for failing to register as an MSB and designate a compliance officer despite having already referred to itself as an exchange.

Registering is an especially safe bet for peer-to-peer cryptocurrency services that generate revenue, regardless of whether they see themselves as exchanges, Padovano said.

“You’re collecting fees … you’re in the business of exchange … you’re using those fees to pay for infrastructure,” Padovano said. “If you went to counsel and said, ‘Should I register as an MSB?’ The only appropriate response to give is ‘Yes.’

Some firms may have adopted that view. Finland-based LocalBitcoins “is in the process of attaining licensure” as a U.S. financial institution in anticipation of formal, clearer requirements to do so, a source close to the company told moneylaundering.com on condition of anonymity.

“The anti-money laundering program is going to get completely overhauled,” said the source, who declined to specify whether the process included registering as an MSB.

A LocalBitcoins spokesperson did not respond to questions about the company’s specific plans, but wrote in an email that the firm requires users to provide identification when they exceed a specific threshold in trading volume.

“The individual remains accountable for complying with their own local regulations when selling/buying bitcoins, and our ID verification procedure is not reducing any KYC [know-your-customer]/ID verification responsibilities the trader might have,” the spokesperson wrote.

The various approaches towards compliance among peer-to-peer firms overlap with a steady growth in popularity of their business model. Paxful, a Delaware-registered peer-to-peer exchange, saw its weekly trading volume triple from $6 million in July 2017 to $18 million last month, according to Coin Dance, a website that tracks cryptocurrencies.

Bisq, which “does not require registration” and describes itself as an “open source project” rather than a company, saw the most active week in its history this month, moderating $1.7 million in trades.

LocalBitcoins has also expanded. In April, the company’s chief executive, Nikolaus Kangas, told CoinDesk that 40 percent of the firm’s users had signed up in the previous six months.

Some of that growth has occurred in areas targeted by U.S. sanctions, including Venezuela, where, according to Coin Dance, LocalBitcoins monthly trading volume rose seven-fold over the course of 2018 to top $18 million this month. Iranian traders sometimes use LocalBitcoins to access foreign markets, a researcher told CoinDesk in April.

The firm’s pursuit of a U.S. license follows the prosecution of a former chiropractor in Louisiana who, along with his son, used the website to sell bitcoins in exchange for $2.5 million in cash and money orders they deposited into bank accounts, then misrepresented the nature of those transactions.

Both pleaded guilty in April 2016 to conspiring to operate an unlicensed MSB.

Peer-to-peer exchanges sometimes emphasize the informality of the transactions they moderate, and, in a bid to avoid regulatory supervision, avoid referring to users as “customers,” said Jim Angleton, president of financial services firm Aegis FS in Miami.

“They’re playing with the dictionary,” Angleton said. “None of them know how to maintain KYC [protocols].”