FinCEN received 7,100 Suspicious Activity Report from Crypto Service Providers since May
The Financial Crimes Enforcement Network (FinCEN) issued guidance back in May explaining the Banking Secrecy Act and how Anti-money laundering laws are applicable to digital currency space.
Kenneth Blanco the director of the FinCEN recently revealed that since the May guidance a total of 11,000 crypto service providers have filed the Suspicious Activity Report (SAR) with FinCEN. Out of these 11,000 SARs 2,100 cases directly referred to the guidance. The increased number of reported suspicious activities suggest that Virtual Asset Service Providers are keeping a close watch on their platforms and complying well with the set regulations in place.
Blanco himself appreciated the added concern from service providers which is evident from the thousands of complaints filed. He said,
“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us.”
Blanco also revealed that Venezuela which has been in financial turmoil for quite some time now reports the highest number of suspicious activities. The hyperinflation combined with a corrupt government diminished Venezuelan's national fiat and currently, it's not even worth the paper it is printed on. As a result, the government turned towards digital space and launched a national cryptocurrency called Petro backed by the country's oil reserves.
However, the authorities did not pay much attention to developing a robust digital currency and many analysts who were able to analyze Petro's whitepaper called it a fraud and a money-laundering machine. The recent FinCEN report seems to confirm that.
The Rising reporting of Crypto-related Suspicious Activity is Good for Space
While more and more domestic Virtual Asset Service Providers are reporting crypto transactions related to suspicious activities on the dark web which is a great sign and could pave the path for a better regulatory framework in the future.
Cryptocurrency space is relatively new and most of the elder population is not aware of how it works. Thus it becomes much easier for scammers to fool these citizens which puts them at higher risk. Blanco believed more service providers and individuals who are currently not reporting these need to get on board as well, he further said,
“If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.”