Kenneth A. Blanco, Director of the Financial Crimes Enforcement Network (FinCEN) Director has recently stated that anti-money laundering (AML) laws will be strictly enforced when it comes to cryptocurrencies.
Speaking at the Chainalysis Blockchain Symposium, Blanco said that an increased number of cryptocurrency businesses are reporting suspicious transactions to the government, with FinCEN having received more than 10,000 suspicious activity reports related to virtual currencies since its advisory went live in May.
Blanco stated that:
Having a clear and frank dialogue between the public and private sectors is important in creating financial transparency and inclusion
He noted that it is also important, as future payment systems are developed, to:
identify, track and stop criminals and other bad actors … from co-opting innovation and technology in order to use and abuse our financial system.
The US are not alone in this pursuit, as in June of this year, the Financial Action Task Force, a Paris-based task force operating as a global regulatory firm, released guidelines requiring regulators and virtual asset service providers to collect and share personal data of transactions. The recommendation imposed the same standards on the cryptocurrency sector as those that are normally shouldered by the banking industry.
In 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) announced the implementation of more robust cryptocurrency exchange regulations. The new crypto regulations required exchanges operating in Australia to register with AUSTRAC, identify and verify users, maintain records, and comply with more stringent government AML/CTF reporting obligations.
As has been seen with Westpac and Afterpay AML non-compliances, AUSTRAC has been increasingly robust and litigious in the enforcement of AML/CTF Act obligations. The penalties for non-compliance are significant. As the cryptoasset and blockchain industry continues to become more sophisticated, compliance will (and should) remain a priority for any business in the space.