FinCEN proposes designating crypto mixers as money-laundering hubs
cointelegraph.comThe United States Treasury Department's Financial Crimes Enforcement Network, or FinCEN, has proposed designating cryptocurrency mixing as an area of "primary money laundering concern" following Hamas’ attack on Israel.
In an Oct. 19 notice, FinCEN said it had assessed that "the percentage of CVC [convertible virtual currencies] transactions processed by CVC mixers that originated from likely illicit sources is increasing". FinCEN proposed requiring domestic financial institutions and agencies to "implement certain recordkeeping and reporting requirements" for transactions involving crypto mixers.
"FinCEN considered issuing a rule pursuant to section 311 [of the U.S. Patriot Act] that would have been narrowly scoped to address terror finance involving Hamas and ISIS and/or North Korea-sponsored and -affiliated actors," said the notice. "However, FinCEN determined that such a narrow approach would be insufficient to address the relevant risks [...]"
Deputy Treasury Secretary Wally Adeyemo reportedly said the addition of crypto mixers to entities sanctioned by the U.S. government was aimed at combating digital assets being exploited by “state-affiliated cyber actors, cyber criminals, and terrorist groups.” He cited Hamas — the group responsible for the Oct. 7 attack on Israel — and the Palestinian Islamic Jihad — the organization Israel has blamed for an Oct. 17 attack on a Gaza hospital — illicitly using crypto.
The notice followed concerns voiced by U.S. lawmakers surrounding terrorist organizations allegedly being financed by crypto. On Oct. 17, more than 100 members of Congress called on the administration of U.S. President Joe Biden to “swiftly and categorically act to meaningfully curtail illicit crypto activity.”
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