FinCEN Head: FinTech Firms Must Follow AML Laws

The head of the Financial Crimes Enforcement Network (FinCEN) has warned FinTech firms that they must abide by anti-money laundering (AML) laws.

“The expectation is that you will comply with existing regulation,” said Director Kenneth Blanco at a FinTech event, according to American Banker.

The warning seems to be aimed toward cryptocurrency exchanges and FinTech firms that have the ability to allow anonymous users to utilize funds for criminal behavior.

“Don’t tell me you can’t figure out how to comply. Come on. Give me a break,” he added. “You may not want to, but that’s a totally different reason. Totally different issue. But the expectation is that you will, and that you can. We know you can.”

He specifically mentioned the opioid crisis and human trafficking as criminal activities where crypto could be used, noting that AML policy stresses transparency about the parties involved in a particular transaction.

“There is a reason you want to know … the person on the other side of that transaction — they might be dealing in some kind of illicit activity,” he said. “Whether it’s opioids … or human [trafficking] on the other side, … you want to know who that person is. It ain’t that hard. All we’re asking for is name, address, account number, transaction, recipient and amount. It ain’t hard. So when you tell me you don’t know who’s on the other side, you’ve got a big problem, because you are required to know, and that is what our expectation is going to be.”

While he didn’t mention Facebook’s planned crypto Libra specifically, Blanco did say that an AML program is absolutely essential for any new payments provider.

“I don’t see stablecoins as different from any other cryptocurrency. You have to look at what the vulnerabilities are,” Blanco said.

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