Cryptocurrencies Are on FinCEN's First 'National Priorities' List

The financial surveillance agency is pointing a finger at crypto in its new plan to combat terrorism financing.

AccessTimeIconJun 30, 2021 at 9:46 p.m. UTC
Updated Sep 14, 2021 at 1:19 p.m. UTC
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The U.S. Financial Crimes Enforcement Network (FinCEN), an agency of the Treasury Department tasked with preventing and punishing money laundering and other financial crimes, has reiterated its longstanding attention to cryptocurrency.

In the agency’s first list of government-wide priorities published Wednesday, FinCEN identified eight priorities: corruption, cybercrime and relevant virtual currency considerations, terrorist financing, fraud, transnational criminal organization activity, drug trafficking, human trafficking and proliferation financing. 

So far, the agency’s list of priorities is not connected to any policies. According to FinCEN’s statement, the agency “will issue regulations at a later date that will specify how financial institutions should incorporate these Priorities into their risk-based AML [anti-money-laundering] programs.”

FinCEN has been wrestling with its approach to cryptocurrencies since March 2013, when it issued guidance on how U.S. anti-money-laundering regulations applied to the nascent field.

In late 2020, during the waning days of the Trump administration, the Treasury Department proposed a hotly debated rule that would require crypto exchanges to identify personal wallets making large transactions. Under the Biden administration, FinCEN has not decided whether to finalize that rule, the agency's director, Michael Mosier said in May.

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Acting FinCEN Director Michael Mosier said "nothing's been decided" about a controversial data collection rule during Consensus 2021.

The Internal Revenue Service (IRS), another agency of the Treasury Department, has also made headlines – first in 2016 and again earlier this year – for issuing controversial “John Doe” summons to crypto exchanges for names associated with large transactions. 

FinCEN's list of priorities was made in response to last year's National Defense Authorization Act, which included new requirements for the agency's AML work.

The inclusion of virtual currencies and cybercrime in the list also comes in the wake of several high-profile ransomware attacks, like the Colonial Pipeline hack, in which the criminals were paid out in bitcoin (and later reclaimed).

“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,” FinCEN said in a statement.

FinCEN sees virtual currencies as “a substantial financial innovation,” but says they’re the “preferred form of payment” for a variety of illicit activities including ransomware, illicit drugs, and even “used by some of the highest priority threat actors to advance their illegal activities and nuclear weapons ambitions.” 

Read the full document:

UPDATE (July 5, 01:35 UTC): Edits first paragraph to clarify that FinCEN has long paid attention to crypto; adds background in fourth, fifth and seventh paragraphs, replaces former FinCEN director's photo with current acting director's.


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