US Regulators Will “Aggressively Pursue” ICO Tokens And Crypto Mixers Worldwide
Crypto traders, while they have plenty of freedom in some ways in the financial industry, find that there are two main concerns for their efforts. The first is that many platforms require identification documents, which is a major change from what they used to be. The second issue is that there are many cryptocurrency platforms that have decided to ban users from certain countries.
Unfortunately, this typically leads to users feeling resentful and angry towards those companies, but the lack of flexibility is primarily due to the regulators in charge for that area.
The United States has set itself apart in this issue, since they do not see their regulations as a restriction against international borders, specifically for unregulated services. Instead, the Director of the Financial Crimes Enforcement Network, Kenneth A. Blanco, has taken to explain to the public the intentions of the agency and cryptocurrency.
The main message he has is that the federal government is prepared to take action against any entity that tries to operate within its “domain,” according to news reports at Bitcoin.com.
In his speech, he clarified that each and every service that involves the use of transacting and transmitting money will require compliance with AML/KYC standards. Furthermore, this restriction is both fiat-to-crypto and crypto-to-crypto trading. In order to ensure that they follow the regulations set forth, any company that allows these transactions will have to register with FinCEN first. They also have to keep an AML program, while reporting the measures that they take to ensure compliance.
In reference to these efforts, Blanco said,
“It is important to understand that these requirements apply equally to domestic and foreign-located convertible virtual currency money transmitters, even if the foreign located entity has no physical presence in the United States, as long as it does business in whole or substantial part within the United States.”
While discussing the regulations, he showed that that FinCEN and the IRS have already evaluated a total of 30% of all registered users and administrators, going as far back as 2014. They have an algorithm in place now that sends them over 1,500 reports monthly that involve “suspicious activity” to track these details.
Even though most of the discussion held by Blanco involved crypto businesses that allow “money transmission,” there were a few particular areas of interests that he highlighted.
With one note regarding mixers, he said,
“Businesses providing anonymizing services (commonly called ‘mixers’ or ‘tumblers’), which seek to conceal the source of the transmission of virtual currency, are money transmitters …and, therefore, have regulatory obligations.”
Blanco also heavily spoke about companies that host Initial Coin Offerings (ICOs). ICOs have been a rather sore subject, considering the massive amount of fraud and scams that they have been in the middle of.
“While ICO arrangements vary and, depending on their structure, may be subject to different authorities, one fact remains absolute: FinCEN, and our partners at the SEC and CFTC, expect businesses involved in ICOs to meet all of their AML/CFT obligations. We remain committed to taking appropriate action when these obligations are not prioritized, and the U.S. financial system is put at risk.”
Bringing his speech to a close, Blanco issued a warning to companies and individuals that do not want to comply with their present regulations.
“FinCEN will aggressively pursue individuals and companies who do not take their obligations under U.S. law seriously, whether by targeting victims or enabling those who do.”