FinCEN Reveals Surge in Crypto Suspicious Activity Reports


US Financial Crimes Enforcement Network states that there is a surge in crypto Suspicious Activity Reports (SARs). FInCEN director notes that the complaints have surpassed 1,500 per month.

13 August, AtoZ Markets The director of the US Financial Crimes Enforcement Network (FinCEN), Kenneth A. Blanco, has informed a public about the surge in filings of crypto-related Suspicious Activity Reports (SARs). According to him, the complaints have surpassed 1,500 per month. 

FinCEN Reveals Surge in Crypto Suspicious Activity Reports

Mr. Blanco’s comments appeared as part of his speech during the 2018 Chicago-Kent Block Legal Tech Conference August 9. He has noted that FinCEN has a role in regulation and law enforcement for the emerging cryptocurrency market. The director also stated that the agency is collaborating with the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission (CFTC). He has been quoted as saying:

“[While] innovation in financial services can be a great thing… we also must be cognizant that financial crime evolves right along with it, or indeed sometimes because of it, creating opportunities for criminals and bad actors, including terrorists and rogue states.”

Mr. Blanco has highlighted that the compliance with specific regulatory measures is vital in order to protect the “incredible innovations” of the fintech frontier. He also has noted that “harm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world.”

As it is outlined in FinCEN’s guidelines, any acceptance or transfer of value that substitutes for fiat currency is regarded to be a money transaction. This, in turn, triggers specific regulatory violations under the U.S. Bank Secrecy Act (BSA).

Blanco on Regulatory Compliance

Mr. Blanco has further stated that identical obligations are applied to businesses that provide anonymizing services. These companies are often called “mixers” or “tumblers.” They seek to hide the source of the transmission of cryptocurrency. In addition, exchanges that are located outside of the US but doing business in this country are also overseen by the agency. 

The director has also mentioned that SARs’ submission is on the increase, the agency is “surprised” to see businesses taking appropriate steps to meet their regulatory requirements “only after they receive notice [that an examination is forthcoming].” “Let this message go out clearly today: This does not constitute compliance,” he noted.

As per Mr. Blanco, initial coin offerings (ICOs) might fall under overlapping jurisdictions of different US regulatory agencies. 

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