FinCEN’s proposal could have a chilling effect by further associating certain crypto activities with terrorist financing and money laundering, according to Alex Zerden, a former FinCEN official who founded financial technology and risk advisory firm Capitol Peak Strategies.
“No one was surprised to see this identified,” considering recent actions taken by the U.S. authorities against mixers, said Zerden. Although the proposal has likely been in the works for some time, announcing it now is a way to demonstrate to lawmakers the Biden administration is taking action, Zerden said.
The U.S. Treasury and Justice Departments have focused much of their efforts in recent years on targeting crypto platforms whose anonymity services or weak compliance systems have allowed bad actors to finance their operations.
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