On a daily basis, new regulations, laws and measures are put in place around the world to accommodate the ever-growing cryptocurrency industry and all the implications of its growth. One of the biggest issues that is faced by regulatory bodies around the world with regards to crypto is the issue of money laundering. Money laundering has been cited as one of the constant criticisms of cryptocurrency use and many governments are taking steps to prevent crypto enabling money laundering such as requirements of identification on crypto exchanges, tracking of crypto transactions and more stringent tax requirements for crypto users.
The deputy director of the Financial Crimes Enforcement Network in the United States has recently come out to state that the cryptocurrency industry cannot allow money laundering measures to take a fall backwards because of them.
These remarks we made on February 6, 2020 by FinCEN deputy director Jamal El-Hindi at the Securities Industry and Financial Markets Association 20th Anti-Money Laundering (AML) and Financial Crimes Conference. At the conference, El-Hindi gave a speech which touched on the complexities of the securities and futures industry and how this poses a problem to the prevention of financial crimes. The industry is comprised of the trading of securities, futures and other financial tools and this complex web of transactions, companies and individuals sometimes makes it hard to perform due diligence. This is why the existence of know-your-customer and anti-money laundering measures is essential.
El-Hindi also touched on social media and messaging platforms who are interested in going into cryptocurrency and stated that they will also need to meet the same stringent requirements. Notable cases of these include Facebook, Telegram and Kik.
“Social media and messaging platforms and others now focusing on the establishment of cryptocurrencies cannot turn a blind eye to illicit transactions that they may be fostering,” El-Hindi stated, adding that the influence of these companies and their crypto projects carries back into the world of traditional finance.
“To the extent that the financial sector chooses to move forward with […] these emerging systems […] we are not going to allow it to slide backward on the protections and appropriate transparency that we have collectively worked so hard to weave into the financial system.”