FinCEN lists Bitcoin and cryptocurrencies as top AML and CFT priorities
|- FinCEN has issued a set of priorities for anti-money laundering and countering the financing of terrorism policy.
- Cryptocurrencies have made it to the list, as the agency noted its concerns with its involvement in recent ransomware attacks.
- The federal agency says that Bitcoin and other digital assets are a preferred form of payment for illicit activities.
The United States Financial Crimes Enforcement Network (FinCEN) has identified cryptocurrencies as one of the anti-money laundering and countering the financing of terrorism (AML/CFT) priorities.
Concerns over cryptocurrencies used for illicit activities
On June 30, FinCEN issued its first-ever list of priorities for AML and CFT policy, intended to assist financial institutions in their efforts to meet their regulatory obligations. The final revision of the guidelines is set to be published within the next six months.
The FinCEN agency, which sits within the Treasury Department, is responsible for preventing and punishing money laundering and other financial crimes and has highlighted cryptocurrencies as one of the eight main priorities.
These priorities include corruption, cybercrime, virtual currency considerations, terrorist financing, fraud, transnational criminal organization activity, drug trafficking, human trafficking and proliferation financing.
Although the list of priorities is not connected to any policies, FinCEN will issue new regulations at a later date, specifying guidelines of how financial institutions should incorporate the aforementioned priorities into their risk-based AML programs.
The federal agency’s main concerns come after several high-profile ransomware attacks, including the Colonial Pipeline hack in which the hackers asked to be paid out in cryptocurrency, despite the assets being reclaimed later. FinCEN stated:
Treasury is particularly concerned about cyber-enabled financial crime, ransomware attacks, and the misuse of virtual assets that exploits and undermines their innovative potential, including through laundering of illicit proceeds.
The agency further believes that cryptocurrencies are a preferred form of payment for a variety of illicit activities including ransomware, illicit drugs and even nuclear weapons ambitions, despite also stating that the new asset class is a “substantial financial innovation."
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