Cryptocurrency and FinCEN: AML Rules Coming Soon

FinCEN (Financial Crimes Enforcement Network) director, Kenneth Blanco has revealed plans to enforce Anti-Money Laundering (AML) laws.

No mercy for cryptocurrency. The FinCEN director, Kenneth Blanco reportedly revealed the plans at a conference hosted by Chainalysis, New York-based blockchain analysis company.

Quoting Blanco: “That’s our expectation. You must comply. I don’t know the cause of the shock. There’s nothing new.”

Therefore, Blanco pointed out that the Financial Action Task Force (FATF) guidelines (also called travel rule) apply to digital currencies. Also, the government expects crypto firms to comply.

Importantly, a part of the anti-money laundering regulations requires cryptocurrency exchanges to verify their customers’ identities. As well as to identify the original parties and beneficiaries of transfers of $3,000 or higher. Also, transmit the information to counterparties if they exist.

Furthermore, Blanco said if the rules apply to CVCs (convertible virtual currencies), then they expect you to comply.

Interestingly, the decision by the government comes as cryptocurrency crime soared into billions of dollars. Accordingly, global investigators grapple with major money laundering hubs that connect the virtual worlds.

About the travel rule

FinCEN issued the travel rule first in 1996 as part of the anti-money laundering standards that apply to all U.S. financial institutions.

Besides, the regulatory agency expanded the rule’s coverage in March 2013. Thus, making it cover crypto exchanges as well. Then, earlier in May, the Treasury unit affirmed that guidance. The government’s action resulted from the guidelines released in June by the U.S. Treasury led-Financial Action Task Force (FATF).  An inter-governmental global organization devoted to battling money laundering and terrorism financing. FATF also directed crypto exchanges and regulators around the world to comply with the travel rule. The agency gave them about a year to do so from June earlier this year.

To remind, the Financial Crimes Enforcement Network (FinCEN) already penalized a peer to peer trader for violating anti-money laundering (AML) rules. Find out more here.


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