U.S. Finance Crime Agency Monthly Gets 1,500 SARs
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12 August
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A speech by the Director of the US Financial Crimes Enforcement Network (FinCEN), Kenneth A. Blanco at a tech conference which took place at the Chicago-Kent College of Law indicated that the agency's achievements in regulating crypto were evident and that more and more reports on suspicious activity are being shared.

Blanco stated that the agency has had its eye on crypto since 2011, issuing rules so that prior legislation was applicable to firms that deal with “value that substitutes for currency.” In 2014 more regulations addressing different spheres of crypto were issued. In the opinion of Blanco, all businesses that deal with any kind of money transactions must obey the same rules, businesses that provide anonymous services are no exception.

Since crypto currently means different things to different agencies, it is not the easiest thing to define it in such a fashion that everyone should agree on that definition.

However, Blanco explicitly stated that all companies dealing money transactions are required to register with FinCEN as a money service business, have anti-money laundering programs, and keep a track of all the transaction in order to be able to track suspicious-looking activity.

The Director of FinCEN drew the attention of his listeners to the importance of suspicious activity reports (SARs), claiming that they were getting more than 1,500 SARs a month. This is a good thing, explained Blanco, for these are leads to finding the wrongdoers.

One such caught felon was Alexander Vinnik, currently waiting in a Greek jail cell to be handed over to the U.S. or Russia. Vinnik was issued with a $12 million civil fine, for an array of illegal activities as an operator of the BTC-e crypto exchange.

Blanco stated that as a result of collaborating with the IRS, the U.S. tax service, the collected SARs have aided the agency in looking into just below a third of the crypto crimes in the U.S. since 2014.

Blanco believes that “compliance does not begin because you may get caught, or because you are about to be discovered,” and that the agency is willing to help companies understand what is required of them, however, “avoiding the question for fear of the answer is not a legitimate strategy.” He also claimed that firms ought to take to action before, and not after they are confronted: “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.”

WHY IS THIS IMPORTANT?

  1. The fact that crypto crime is being pursued is reassuring news for the crypto community.
  2. Awareness of crypto-related crime and the businesses readiness to cooperate with governmental agencies in order to catch any suspicious activity is commendable.
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