Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
FinCEN Proposes New Rules Targeting Crypto Mixers
Regulation | Oct 25, 2023
Image: Unsplash/Vitaly Taranov
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a new regulation targeting Convertible Virtual Currency Mixing (CVC mixing).
FinCEN has announced a Notice of Proposed Rule Making (NPRM), identifying international CVC mixing as a primary concern in money laundering activities. This proposal aims to increase transparency around CVC mixing, preventing its misuse by malicious entities such as Hamas, Palestinian Islamic Jihad, and the Democratic People’s Republic of Korea (DPRK). The proposal is available for viewing in the federal register here.
In May 2022, the US Treasury of Foreign Assets Control designated crypto mixer Blender.io as a Specially Designated National ("SDN"), marking the first time a virtual currency mixer had been sanctioned.
See: Russian Duo Charged in Historic Mt. Gox Hack and BTC-e Money Laundering Operation
Andrea Gacki, FinCEN Director:
CVC mixing offers a critical service that allows players in the ransomware ecosystem, rogue state actors, and other criminals to fund their unlawful activities and obfuscate the flow of ill-gotten gains. This is FinCEN’s first ever use of the Section 311 authority to target a class of transactions of primary money laundering concern, and, just as with our efforts in the traditional financial system, Treasury will work to identify and root out the illicit use and abuse of the CVC ecosystem.
The proposed rule aims to deny illicit actors access to the U.S. and global financial systems by increasing transparency and reporting requirements for financial institutions.
The NPRM is currently available for public viewing, and written comments can be submitted within 90 days of its publication in the Federal Register.
See:
US Treasury Demands DeFi Adhere to Anti-Money Laundering Rules
Cullen Commission Money Laundering Report Estimates Billions Laundered in B.C. Every Year
By targeting CVC mixing, the Treasury aims to combat the illicit use of virtual currencies by various actors, safeguarding the integrity of the financial system. This initiative reflects the government’s proactive approach to adapting to the evolving landscape of virtual currencies and ensuring that innovation does not compromise security.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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