Plans to announce strategy to combat illegal finance

On the 7th, the U.S. Department of the Treasury released its 2024 risk assessment report on money laundering, terrorist financing, and more. We also analyze cases and risks of criminal organizations using crypto assets (virtual currency) and DeFi.

It also said it plans to unveil a 2024 National Strategy to Combat Terrorism and Other Illicit Finance in the coming weeks to address these risks, including those involving virtual currencies.

The U.S. Treasury says virtual currencies are less likely to be used for money laundering than traditional assets such as fiat currencies. On the other hand, they have observed instances of it being used for ransomware, fraud, drug trafficking, human trafficking, and other illegal activities.

First, it points out that there are virtual currency service providers who do not comply with anti-money laundering and terrorist financing regulations (AML/CFT) and sanctions regulations. By using these companies, which do not collect customer information, it is possible to process criminal proceeds anonymously.

The US Treasury also cited the case of cryptocurrency exchange Binance. Last November, Binance entered a settlement with the U.S. Treasury after pleading guilty to charges related to anti-money laundering (AML) violations. It agreed to pay a fine of approximately 642 billion yen ($4.3 billion).

The U.S. Treasury has once again found that Binance was being used by illegal actors because it did not properly perform KYC checks on many of its users and failed to implement an effective anti-money laundering program. Says.

Moving forward, Binance has agreed to appoint an independent compliance monitor for three years to improve and strengthen its legal compliance program regarding AML and economic sanctions. It will also be confirmed whether transactions suspected of fraud have been reported appropriately.

connection: SEC Crypto Mom and Coinbase CEO comment on Binance’s settlement with the US Department of Justice and CZ’s resignation

Suggests expansion of regulations to DeFi

The U.S. Treasury says some DeFi (decentralized finance) and peer-to-peer (P2P) platforms are not subject to the requirements of the U.S. anti-money laundering law Bank Secrecy Act. He also pointed out.

However, it states that these platforms may also become regulated financial institutions, depending on the circumstances surrounding their financial activities.

Last April, the U.S. Department of the Treasury released a report analyzing the risks of DeFi and recommended that the government consider additional guidance regarding AML/CFT obligations for DeFi services.

connection: U.S. Treasury assesses DeFi financial fraud risks = report

Others pointed out that online games are another way to launder money due to their anonymity and scale. Furthermore, the analysis shows that terrorist networks are diversifying their remittance routes and using virtual currencies, and that there has been a recent trend in particular to seek stable coins with stable values.

On the 6th, Treasury Secretary Janet Yellen urged Congress to enact legislation to regulate stablecoins at the federal level.

connection: We need regulation at the U.S. federal level.” Treasury Secretary Yellen emphasizes stablecoin regulation bill in Congress

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