U.S. Regulators Release Joint Statement on Illegal Use Of Cryptocurrencies

Three major financial regulators within the United States have come together to release a statement on cryptocurrencies, with a particular focus on ensuring investor and user protection. 
In a joint statement published on October 11, the United States Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CTFC), and the Financial Crimes Enforcement Network (FinCEN) came together to emphasize the importance of cryptocurrency investors abiding by their Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rules when dealing with their favourite crypto assets. 
Signatories to the statement were Chairman of the CFTC Heath Tarbert, FinCEN Director Kenneth A. Blanco, and SEC Chairman Jay Clayton.

The regulators reminded those involved in cryptocurrency trading of their obligations to report their activities under the Bank Secrecy Act, especially concerning the illegal use of cryptocurrencies. On CTF and AML laws, the document reads,
“Among those AML/CFT obligations are the requirement to establish and implement an effective anti-money laundering program (AML Program) and recordkeeping and reporting requirements, including suspicious activity reporting (SAR) requirements.”
As the document notes, financial institutions that have AML and CTF obligations include money services businesses (registered with the FinCEN), mutual fund operators, and broker-dealers (registered with the SEC) and financial brokers (registered with the CFTC). These institutions are responsible for establishing appropriate security programs, including effective record keeping, and reporting suspicious activity as at when due.
The focus on protection
The recommendations were, in a way, similar to those proposed by the Financial Action Task Force (FATF), a leading AML enforcement organization, back in June. At the time, the FATF claimed that cryptocurrency exchanges, wallet providers, and other asset custodians should be more conscious of their security and investor protection obligations, while adding that appropriate AML and CTF guidelines should be implemented before June 2020, when a review a will be conducted.
As part of the guidelines put forth by the FATF, asset custodians are to keep relevant information about their customers and the transactions they enter into, including but not limited to the names of accounts that enter into transactions, their locations, and the exact amount of money transferred. In the event that an asset custodian records a suspected illicit transaction, such should be reported to an appropriate financial authority in due time. 
A new day in the cryptocurrency space
Documents and recommendations such as these only go to underscore the focus that authorities have put on illicit cryptocurrency use in the past year. The growing number of instances where crypto assets are used for illegal activities has alarmed lawmakers and regulators, and they believe that the only way to stem this epidemic is through increased control. 
However, some in the crypto space don’t particularly see it as such as well. Cryptocurrency exchange operators have pushed back against the recommendations from the FATF in particular, as many either believe that this is a curtailment of the freedom that cryptocurrencies promised to bring or have issues with actually implementing the safety standards into their platforms.  
Regardless of the concerns that these exchange executives have, it is highly likely that they will find a way to desire compliance before June 2020. Financial regulators are bent on ensuring AML and CFT compliance, even if the security they seek causes infringement on cryptocurrency and the promise of freedom.
Additional measures in the fight against illicit cryptocurrency use are definitely expected, after the FinCEN was recently asked by the United States Congress to study the use of blockchain technology in curbing cryptocurrency crimes. 
According to the” Advancing Innovation to Assist Law Enforcement Act,” which was passed on September 19, the House of Representatives has asked Assistant FinCEN Director Kenneth Blanco to study how emerging technologies, including cryptocurrencies, can be sued in stopping cryptocurrency crimes.
The bill was received on September 23 by the Senate, which referred it to the Committee on Banking, Housing, and Urban Affairs.
The post U.S. Regulators Release Joint Statement on Illegal Use Of Cryptocurrencies appeared first on InsideBitcoins.com.
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