US Will Strictly Enforce Anti-Money Laundering In Crypto


The United States Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco said that Anti-Money Laundering (AML) laws will be strictly enforced in the world of cryptocurrencies.

On Nov. 15, Reuters reported that Blanco made it crystal clear that cryptocurrency companies engaged in money service businesses will have to comply with AML laws and share information about their customers.

Travel rule also applies to crypto

Speaking at a conference hosted by Chainalysis, a New York-based blockchain analysis company, Blanco told the audience that the so-called travel rule also applied to digital currencies and that the government expects crypto firms to comply. He said:

“It [travel rule] applies to CVCs [convertible virtual currencies] and we expect that you will comply, period. […] That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”

In what has now become known as the travel rule, the Financial Action Task Force (FATF) guidelines require regulators and Virtual Asset Service Providers (VASPs) to collect and share personal data of transactions. The recommendation imposes the same standards on the cryptocurrency sector as are normally shouldered by the banking industry.

Blanco further pointed out that FinCEN has been conducting investigations that include compliance with the travel rule since 2014, adding that it is the most commonly cited violation among money service businesses engaged in digital currencies.

Anti-Money Laundering laws apply to everyone

In October, Blanco spoke at the University of Georgetown where he said that AML laws apply to everyone. Blanco pointed to the key objective of AML policy, which is obtaining information about who is involved in a given payment, saying:

“There is a reason you want to know … the person on the other side of that transaction — they might be dealing in some kind of illicit activity. Whether it’s opioids … or human smuggling on the other side … you want to know who that person is.”

Blanco told the audience at the time that it is not that hard to obtain that information. “All we’re asking for is name, address, account number, transaction, recipient, and amount,” he said, adding:

“So when you tell me you don’t know who’s on the other side, you’ve got a big problem. Because you are required to know, and that is what our expectation is going to be.”