Two common complaints among crypto traders are that platforms which didn’t previous to are now demanding identification documents and that more venues close their doors to dwellers of some countries. While users naturally lash out at the companies, it is worthy to remember that this is often done under coercion or portent by regulators. The US government, for example, doesn’t consider itself bound by jingoistic borders in pursuing unregulated services.
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The Lengthy Arm of the Law
Kenneth A. Blanco, Director of the Financial Crimes Enforcement Network (FinCEN), a agency in the US Treasury’s Office of Terrorism and Financial Intelligence, has spoken about his force’s approach to cryptocurrency on Thursday. The main takeaway from his speech to the hustle is that the US government will act against anyone it thinks somehow manages within its domain, regardless of jurisdiction.
The director explained that all uses involved with “money transmitting” must comply with some supine of AML/KYC standards and that regulations cover both transactions where the corps are exchanging fiat and crypto, but also transactions from one cryptocurrency to another. To obey with these obligations, companies are required to register with FinCEN, preserve an AML program, and establish recordkeeping and reporting measures. He emphasized, “It is important to covenant that these requirements apply equally to domestic and foreign-located convertible essential currency money transmitters, even if the foreign located entity has no corporal presence in the United States, as long as it does business in whole or worthwhile part within the United States.”
Blanco also shared a one of interesting figures about the authorities’ work. He revealed that FinCEN and the IRS procure examined over 30% of all registered exchangers and administrators since 2014, and that they now be told over 1,500 reports describing “suspicious activity” involving cryptocurrency per month.
ICOs and Mixers in the Crosshairs
While during myriad of his speech the FinCEN director referred to all crypto businesses engaged in “affluent transmission”, he also zeroed in on a few specific segments. Regarding mixers, he famed that “businesses providing anonymizing services (commonly called ‘mixers’ or ‘tumblers’), which undertake to conceal the source of the transmission of virtual currency, are money transmitters …and, accordingly, have regulatory obligations.”
The director also singled out projects handling Initial Coin Offerings (ICOs). “While ICO arrangements reshape and, depending on their structure, may be subject to different authorities, one fact balances absolute: FinCEN, and our partners at the SEC and CFTC, expect businesses involved in ICOs to suffer all of their AML/CFT obligations. We remain committed to taking appropriate action when these contracts are not prioritized, and the U.S. financial system is put at risk.”
Blanco concluded the speech by foretoken that, “FinCEN will aggressively pursue individuals and companies who do not purloin their obligations under U.S. law seriously, whether by targeting victims or give the go-ahead those who do.”
Is the US government adopting the attitude of “Team America: “World The fuzz” good for the crypto ecosystem? Share your thoughts in the comments split below.
Images courtesy of Shutterstock, FinCEN, Wikimedia (AgnosticPreachersKid).
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