FinCEN sees surge in reports of suspicious crypto market activity

August 13, 2018
Chris Wheal

The director of the US Financial Crimes Enforcement Network (FinCEN) revealed in speech on Friday night that the agency had witnessed a surge in cryptocurrency-related Suspicious Activity Reports (SARs).

FinCEN notes rise in number of Suspicious Activity Reports related to cryptocurrencies

Kenneth A Blanco, speaking at the 2018 Chicago-Kent Block Legal Tech Conference, said FinCen was now receiving more than 1,500 SARs a month.

Financial crime evolving

He said: “Innovation in financial services can be a great thing—providing customers greater access to an array of financial services and at faster speeds than ever before.

“However, as industry evolves and adopts these new technologies, we also must be cognizant that financial crime evolves right along with it, or indeed sometimes because of it, creating opportunities for criminals and bad actors, including terrorists and rogue states.”

FinCEN co-ordinates its work with financial regulators the Security Exchange Commission and the Commodity Futures Trading Commission. Blanco said FinCEN’s efforts have had a tangible impact on compliance programmes and had seen SAR filings from crypto exchanges rise “tremendously” over the past few years.

Compliance shortcomings

However, many crypto-related companies still displayed regulatory shortcomings. All financial institutions should be implementing a strong anti-money laundering programme long before they first receive notice that FinCEN is about to examine their activities.

“We have been surprised to see financial institutions establish an adequate number of compliance staff and take appropriate steps to meet their regulatory requirements only after they receive notice,” Blanco said.

He added: “Let this message go out clearly today: This does not constitute compliance.

“FinCEN will hold companies and individuals accountable when they disregard their obligations and allow the financial system to be exploited by criminal actors, whether in wire transfers or cryptocurrencies.”

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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