Some strict AML regulations have to be implemented in the crypto space since the market has spiked the interest from the media and regulators over the past few years. The lack of regulation leads to a lot of criminal activities and the US government has to prepare to act against potential money laundering schemes.
In our cryptocurrency news today we see that the director of the Financial Crimes Enforcement Network (FinCEN), Kennet Blanco, recently stated that that the country is trying to find a way to introduce strict AML regulations on multiple cryptocurrency-related types of businesses. The new ‘’travel rule’’ will require all crypto exchanges to verify the identities of each customer with the KYC process. They will also have to identify the original parties and beneficiaries of transfers for more than $3,000 and that information will be available for all counterparties. Blanco added during a press conference in New York:
“It [travel rule] applies to convertible virtual currencies, and we expect that you will comply period. That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”
Apparently, FinCEN introduced the new rule back in 1996 and the main purpose at that time was also anti-money laundering and covered all financial institutions in the states at that time. Later in 2013, the rule was updated and started including cryptocurrencies as well. The CEO of CipherTRace however, which is a blockchain forensic company, said that the digital assets have never been considered as money and that the travel rule should not be including them.
It’s worth noting that the United States Financial Action Task Force (FATF) published a set of new guidelines for crypto exchanges to follow and all exchanges have time until June 2020 to adjust and to start complying. Cryptocurrencies have also been used mostly for beneficial purposes and they’ve been implicated in the alleged criminal activities.
Also, there is another argument that cash is still the most used method for money laundering and it was also supported by Yaya Fanusie, the director says that the analysis for the Foundation for Defense Democracies Center on Sanctions and Illicit Finance. When he was asked what he thinks about money, he said: ‘’cold is still king.’’
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