October 30, 2019
The Travel Rule Is Not Enough If Crypto Gets Adopted
Last week, at a large fintech conference in Washington, DC, the head of the Financial Crimes Enforcement Network (FinCEN), the arm of the U.S. Treasury Department that enforces anti-money laundering (AML) laws, gave a grave warning to the cryptocurrency space. FinCEN Director Kenneth Blanco stressed that any company that claims its technology can not comply with current AML regulations will not be able to do business in U.S. jurisdiction. However, because the crypto space is evolving faster than regulators, such warnings are not enough to address the scope of money laundering and terrorist financing risk that is likely to arise if cryptocurrencies become a common form of retail payment.
Blanco was specifically talking about complying with the U.S. Bank Secrecy Act (BSA), the statute that all banks and money service businesses must follow in order to hinder illicit financial flows. The BSA requires financial institutions to implement various controls and file various reports with FinCEN to flag activities that may indicate money laundering.
The FinCEN director was also referring to crypto firms’ need to follow the “travel rule,” a BSA requirement for money transmitters to record identification information on all parties in fund transfers between financial institutions. Many in the crypto space have been up-in-arms about the travel rule requirement because cryptocurrency transfers do not intrinsically capture personal identification data. Slowly, however, the industry is contemplating various solutions to help crypto exchanges to identify users on both ends of a transfer.
Read the full article in Forbes.
More from CNAS
-
Hotels and Free Wi-Fi Are Sitting Ducks for North Korean Cybercriminals
Commentary
The dangerous combination of weak or nonexistent cybersecurity protocols, relaxed travelers and employees, and increased e-commerce and digital financial activity provide an i...
By Jason Bartlett
-
Better than Crypto? Why central banks are racing to launch digital currencies
Video
Emily Jin discusses the race for governments to regulate and create their own digital currency. Watch the full conversation from Deutsche Welle....
By Emily Jin
-
OPEC Standoff: Resetting market share
Commentary
Producers such as the UAE want to make money from their assets today and set up robust future asset streams that will be robust to the shift to net zero production....
By Rachel Ziemba
-
Bank of Russia Hiked Rates
Video
Elina Ribakova discusses how the spike in Covid-19 cases and new restrictions could affect the Russian economy with Bloomberg's Alix Steel and Guy Johnson. Watch the full vid...
By Elina Ribakova
