TechFlow — The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed designating cryptocurrency mixing technologies as a “primary money laundering concern.”
This decision stems from concerns related to Hamas’ attacks on Israel. FinCEN noted that “the proportion of transactions processed by convertible virtual currency (CVC) mixers originating from potentially illicit sources is increasing.” Under the proposal, domestic financial institutions would be required to implement “specific recordkeeping and reporting requirements” for transactions involving cryptocurrency mixers. The public will have 90 days to submit comments on the proposal, after which FinCEN will review all feedback before deciding whether to finalize the policy.
Initially, FinCEN considered addressing terrorist financing linked to Hamas, ISIS, and North Korea through Section 311 of the USA PATRIOT Act; however, it later determined that such a narrow approach would not adequately address the associated risks.
