Kenneth Blanco, director of the FinCEN (Financial Crimes Enforcement Network), said recently that the rules would be strictly imposed by the U.S. government that require the firms engaged in cryptocurrency money service businesses, to share data about their customers.
As a part of anti-money laundering guidelines, “Travel Rule” specifies cryptocurrency exchanges to confirm their client’s identities, to identify initial parties and recipients of transfers for 3,000 dollars or higher and transmit that data to other parties if they exist.
Blanco spoke at a conference hosted by Chainalysis,
It (travel rule) applies to CVCs (convertible virtual currencies), and we expect that you will comply period, that’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new,
Moreover, the Travel Rule was initiated by FinCEN in 1996 as a major aspect of against anti-money laundering principles that apply to all U.S. financial establishments. FinCEN extended the rules analysis in March 2013 to be applied to crypto exchanges, too, and in May this year, the Treasury unit confirmed that direction.
“FinCEN has been conducting examinations that include compliance with the fund’s travel rule since 2014,” added Blanco. He further stated that it is the most commonly quoted violation concerned with money service businesses that are engaged in virtual currencies.
Earlier, Dave Jevans, CEO of CipherTrace, in an interview said that individuals in the crypto business were quite surprised at FinCEN’s recent activities because digital currencies have never been categorized as cash and the impression was that the travel rule did not concern them.
Moreover, the U.S. government’s steps came as digital currency crimes increased to billions of dollars, with investigators exploring with money laundering hubs that are the central point of the virtual sphere. Further, CipherTrace, in its latest report published in August, declared that cryptocurrency scams, thefts, and frauds would be larger than 4.3 billion dollars this year.
The Government activity comes into the picture as the guidelines are discharged in June by the U.S. Treasury-led by Financial Action Task Force (FATF), which is an inter-governmental worldwide association dedicated to fighting terrorism financing and money laundering. Also, FATF enforced all crypto exchanges and regulators around the globe to agree with the travel rule, giving them a year to do it from June, the current year.