On October 19, 2023, under Section 311 of the USA PATRIOT Act, the Financial Crimes Enforcement Network is calling for labelling cryptocurrency mixing as a primary concern for money laundering. According to reports, Wally Adeyemo, the assistant secretary of the Treasury, stated that the inclusion of crypto mixers to organizations recognized by the U.S. authorities was done to stop the exploitation of digital currencies by “state-affiliated internet actors, online criminals, and terrorist factions.”
FinCEN put up an ordinance to label mixers as dangers in response to accusations about Hamas along with other terrorist organizations which are largely funded using cryptocurrency. In a broad action they have never made before, American officials want to pursue the entire category of cryptocurrency mixers as a money-laundering concern.
U.S. legislators have pressed the Department of Treasury and the presidency of Joe Biden to take action against the misuse of cryptocurrencies to fund terrorist activities, particularly in context with claims that Hamas had received some cryptocurrencies ahead of its battle recently in Israel. The Treasury Department also issued measures this past weekend targeting people and organizations associated with Hamas, which includes a Gaza-based company that is suspected to have served as a bitcoin pipeline for terrorists.
In an effort to safeguard their illegal activity to the law enforcement, criminals who use mixers in order to hide it from authorities seem to be the primary target of Treasury’s intent of gathering data in order to watch those who use virtual currency “mixing” services, jeopardizing the stability of the banking sector in the United States and its national security.
The drafted rule enforces difficult reporting obligations on banking organizations and agents subject to BSA regulation, however it would solely call for submitting information that the firm already has and would not call upon a lookback to determine and present operations that took place prior to the official rule’s implementation date.
Administration states that forcing mediators to submit data on mixer usage would not prevent consumers from using mixers legitimately for safeguarding their privacy because it is assumed that real consumers don’t have any need to be concerned that their private details could be disclosed to authorities in an encrypted way. The Notice of Proposed Rulemaking (NPRM) confirms the Treasury’s position that there are plenty of valid uses for integrating activities on blockchain technology, while still providing opportunity for substantive discussion during the release and discussion period, which is still available till the 22nd of January 2024.
