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FinCEN director: We Receive 1,500 Virtual Currency Complaints a Month

Last Updated March 4, 2021 3:55 PM
Yashu Gola
Last Updated March 4, 2021 3:55 PM

The US Financial Crimes Enforcement Network (FinCEN) now receives over 1,500 Suspicious Activity Reports, which concern cryptocurrencies like Bitcoin, every month.

The statistics were presented by the FinCEN Director, Kenneth Blanco, during his speech regarding the US agency’s views on decentralized digital assets and virtual currencies. The US Treasury, at the 2018 Chicago-Kent Block (Legal) Tech Conference, stated that FinCEN now receives regular reports from the Money Services Businesses in the virtual currency sector. He acknowledged these businesses for developing new techniques for identifying nefarious activities in cryptocurrency, believing the practice to eventually churn out bad actors, and boost innovation as a whole.

Blanco made it clear that the increasing number of SARs were, in fact, the outcome of their seriousness towards regulating cryptocurrency exchanges.

“FinCEN’s rules apply to all transactions involving money transmission—including the acceptance and transmission of value that substitutes for currency, which includes virtual currency,” he clarified. “Our regulations cover both transactions where the parties are exchanging fiat and convertible virtual currency, but also to transactions from one virtual currency to another virtual currency.”

The regulations referred to the FinCEN’s March 2013 guidelines to cryptocurrency businesses, including crypto anonymizing services, that are obligated to the AML/CFT requirements of The Bank Secrecy Act of 1970 (BSA).

The FinCEN regulations not only applies to the virtual currencies businesses inside the country but also to those operating offshore “as long as [they do] business in whole or substantial part within the United States,” Blanco added while exemplifying BTC-e. FinCEN had slapped a $110 million penalty on the UK cryptocurrency exchange for failing to comply with regulatory policies and procedures and for eventually facilitating financial transactions for cybercriminals. Alexander Vinnika, the person who ran BTC-e, was also fined with a $12 million penalty.

Blanco’s speech also acted as a reminder to businesses that have ignored AML compliance altogether, be it an Exchange or an ATM service. The administrator said that they [crypto businesses] do not implement a robust AML compliance framework until they receive a notice from the FinCEN.

“We have been surprised to see financial institutions establish an adequate number of compliance staff and take appropriate steps to meet their regulatory requirements only after they receive notice.”

Blanco urged the virtual currency businesses to interpret their regulations as an excuse to catalyze the security of their nation and citizens as a whole. He concluded by saying:

“FinCEN will aggressively pursue individuals and companies who do not take their obligations under U.S. law seriously, whether by targeting victims or enabling those who do”

Featured image from Flickr/US Embassy Guatemala .