Last year, at the peak of 2019’s crypto mania when Bitcoin was trading up 300% in four months, Steven Mnuchin, the Secretary of the U.S. Treasury and close advisor to President Trump, revealed his intent to crack down on the crypto industry.
After stating that cryptocurrencies pose a “risk to the financial system” and a “national security issue” if they are used like Swiss bank accounts (President Obama likened Bitcoin to a digital Swiss bank account), Mnuchin said that there will be a concerted effort to crack down on digital assets:
We’re going to make sure we have a unified approach and my guess is that there are going to be more regulations that come out from all these agencies.
He added that “we” (referring to the government) will do anything to keep the primacy of the U.S. dollar in check.
Mnuchin doubled down on this stance in a recent Senate hearing, confirming that there will be an imminent move against cryptocurrency-enabled crime.
Senate Hearing: Treasury Secretary Confirms Impending Crackdown on Bitcoin
Speaking during a hearing held by the Senate Finance Committee, Munchin said that the Financial Crimes Enforcement Network (FinCEN) branch of the Treasury will soon roll out “significant new requirements” for cryptocurrencies and respective service providers. He added:
We want to make sure that technology moves forward but, on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.
Mnuchin did not elaborate on what requirements FinCEN will soon be implementing, though considering his previous comments, they won’t be positive for the more privacy-minded individuals in this space.
This comes shortly after a White House budget proposal for the fiscal year of 2021 suggested returning the United States Secret Service — which actually enforces many financial crimes in America — to the jurisdiction of the Treasury.
The budget proposal suggests that this move will “create new efficiencies” in how the Service investigates potential criminal acts enabled by digital assets and will “prepare the Nation to face the threats of tomorrow.”
Response to Growing Levels of Crypto Crime
As reported by Blockonomi previously, this pledge for an industry crackdown comes as the data has confirmed that criminals remain enamored with Bitcoin and other cryptocurrencies as a means of transaction.
In Chainalysis’ latest report, the blockchain analysis firm found that the value of cryptocurrency spent on dark web markets, where individuals can buy items like fake identification and drugs, surged 60% to a “new high” of $601 million in Q4 of 2019. Chainalysis added that 1% of Bitcoin transactions are used for illicit activity — up from the approximately 0.5% seen in the year prior.
The U.S. may also be responding to countries across the pond in Europe, which recently have been mandated to implement more stringent KYC and AML practices (specifically for crypto exchanges) due to a new regulatory outline for eurozone nations.
The directive, dubbed 5AMLD, makes cryptocurrencies and exchanges/service providers “obligated entities,” meaning they face the same AML regulations applied to financial institutions: the regulations of customer due diligence and the submission of suspicious activity.
The directive also says that government agencies should begin to obtain the addresses and identities of owners of virtual currency, thereby hurting the anonymity that traditionally came with using assets like Bitcoin.
The post Treasury Secretary Confirms Impending Crypto Crackdown in Senate Hearing appeared first on Blockonomi.
February 13, 2020 at 09:13AM https://blockonomi.com from Blockonomi https://ift.tt/3bzlopR
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