When discussion is held about Crypto development and regulation regarding cryptocurrency in the financial world, the issue of anti-money laundering measures inevitably comes up each time. This is because since the inception, cryptocurrencies have been accused of being tools for money laundering and as a result of this reputation, cryptocurrency firms are constantly having to defend themselves against accusations like this. Even Facebook, in the process of trying to launch the Libra token, have consistently had to speak out about the anti-money laundering measures that will be put in place for libra.
According to a November 15, 2019 report, Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco has stated that all cryptocurrency companies that engage in money services must comply with anti-money laundering measures as well as know-your-customer requirements.
The statement was made during a recent conference hotel by Chainalysis and according to Blanco, the crypto firms must also abide by the travel rule. The travel rule is a requirement that states that firms that offer money services must collect and share information about transactions and Blanco has made it clear that the crypto industry will not be exempt from this and will do the same thing as the banking industry in that regard.
“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,” he said.
The FinCEN has already gotten ahead of this as Blanco stated that they have been conducting investigations into compliance with the travel rule since the year 2014 and that it is the most common violation reported among cryptocurrency films.
The travel rule, according to a speech given by Blanco at the University of Georgetown earlier this year, is to help the agency to understand who is involved in transactions.
“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,” he said back in October 2019.