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FinCEN Director Reports 1500 Suspicious Crypto SARs Monthly

The director of the US financial crimes network, or FinCEN, Kenneth A. Blanco has reported that the agency was receiving an excessive number of reports regarding suspicious activity related to cryptocurrencies, climbing over 1500 reports on a monthly basis. His statements come as part of a speech by the director on the 9th of August during a tech event.

Proper Regulation


Blanco then highlights FinCEN’s consistent part in maintaining and providing regulations and enforcing the law within the rapidly developing cryptocurrency-sphere and additionally, collaborates with the SEC and the CFTC, official financial watchdogs within the US. He states that even though financial innovation is a good thing, more awareness is needed in regards to the rate of cyber and financial crime evolving at the same pace.


The director then stressed on the importance of the steps required to provide complete security for unique innovations of the financial technology environment, individual compliance with enforced regulations due to the fact that unprecedented speed, wide reach, and obscurity may severely damage them. Following previous guidelines from 2013, any asset that is transferred or acquired as an alternative to traditional and fiat currencies will be considered as transmitting money.


As companies involved in money transmission (MSBs), cryptocurrency exchange platforms are mandated to report any suspicious activity in the form of SARs and transaction reports (CTRs) and of course full compliance and cooperation with AML laws and CFT platforms, cutting down on terrorist funding in any way.


The director explained that similar regulations and requirements apply to any business operating under the same methods and providing services under complete anonymity referred to as mixers that are aiming to cover and hide where a cryptocurrency is being transmitted from. Offshore crypto-exchanges are also tracked and followed by the agency to ensure authenticity.

Speech

Blanco provided a display of the agency’s repose last year against BTC-e, a Russian cryptocurrency exchange and providing a clear example of the efficiency and importance of SARs in the terms of filings from both banks and additional exchange platforms contributing to any police or official law enforcement investigations.

He stated that through continuous and growing reports of suspicious activity being handed in, the agency was caught off guard as a result of more companies and businesses complying and making the necessary moves to fully comply with enforced regulations only after a warning of examination has been issued. He also reiterates that this does not count as compliance.

As per the director, FinCEN, the IRS and the Bank Secrecy Act, all have researched and inspected over 30% of every officially registered cryptocurrency exchange since in the last four years. The director also turned more attention towards ICO and explaining that they may operate under contradicting avenues belonging to different regulators within the US, AML and CFT laws are mandatory no matter the location.

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