The importance of Regulating Cryptocurrency
Cryptocurrency has been a source of very large fraud and illegitimate gains in the Billions of dollars and that has gotten the attention of Government Regulators, like FinCen, Financial Crimes Enforcement Network, part of the United States Treasury Department, who now require that those involved with the exchange of cryptocurrency register as Money Transmitters so they can then report suspicious activity to FinCen.
The Financial Crimes Enforcement Network is a government bureau that maintains a network whose goal is to prevent and punish criminals and criminal networks that participate in money laundering and other financial crimes. FinCEN operates domestically and internationally, and it consists of three major players—law-enforcement agencies, the regulatory community, and the financial-services community.
President Joe Biden is now advocating a framework for further cracking down on fraud in the digital asset space, including cryptocurrency and potentially government-issued digital coins. In it the existing regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are referenced as potential regulators of such digital currencies.
The framework follows an executive order issued in March by Biden, and the intent is to address about half a dozen priorities other than addressing fraud, but that is certainly an important part of the order. At this stage there are no firm mandates, just an indication of proposed direction; however, the President will evaluate whether to call on Congress
to amend the Bank Secrecy Act, and laws against unlicensed money transmitting to apply explicitly to digital asset providers.
Biden’s plan outlines several key areas, including: protecting individuals and businesses, ensuring financial stability, fighting illicit finance, and exploring a new digital dollar or CBDC.
In terms of the next steps, the framework further states that “Treasury will complete an illicit finance risk assessment on decentralized finance by the end of February 2023.”
CoinBeam, as a provider of cryptocurrency wallets is registered with FinCen as a Money Transmitter and takes Anti-Money Laundering very seriously, and welcomes further regulation in the digital asset space to better protect its customers and help eliminate fraud in this space.