2018-8-14 17:00 |
FinCEN is an important part of the US Department of Treasury that helps in the enforcement of financial rules both domestically and abroad. Its director, Kenneth Blanco, believes that cryptocurrencies show us both the sides of innovation — better services and increased criminal activity. Speaking at the 2018 Chicago-Kent Block (Legal) Tech Conference, he discussed cryptocurrencies and financial innovation in great detail.
How Does FinCEN Approach Cryptos?In a speech, Blanco said that the financial innovation could be a great thing but “financial crime evolves right along with it.” He added that virtual currency could be an example of both these aspects of innovation. While major businesses are looking for blockchain-based payments that could help in faster global remittances, the system could be exploited for laundering money, as well as illicit finance. He continued:
“Nobody here today wants to see innovative products and services misused to support terrorism, facilitate child exploitation, or become another vehicle for criminals to carry out fraud, identity theft, corruption, or extortion.”
He also said:
“[H]arm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world.”
Blanco commented that the role of FinCEN would be the protection and security of the financial system from those who want to exploit it.
What About Regulations Related to Cryptos?Blanco said that entities that are associated with cryptocurrencies (accepting and transmitting physical currency or virtual currency between people or to different locations) would be subject to the AML/CFT requirements in accordance with the Bank Secrecy Act (BSA). This means that all virtual currency transmitters will have to be registered with FinCEN as money service businesses and comply with their AML program as well.
Additionally, these entities will have to maintain appropriate records and file Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) with the agency. The laws will be applicable to both foreign and domestic entities.
Foreign entities do not need to have a physical presence in the US to comply with these regulations. As long as they are doing business in the country, they are not exempt and must comply with the requirements.
It appears that FinCEN has a very balanced view on cryptocurrencies and wants to bring exchanges and other crypto entities under a regulation that could help provide safer investment environment to US consumers.
FinCEN Director Kenneth Blanco Discussed Innovation and Virtual Currencies in Chicago Event was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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