Congress wants FinCEN to expressly cover cryptocurrencies

Getting your Trinity Audio player ready...

A bill being reviewed by the US Congress is pushing for an amendment to the jurisdiction of the Financial Crimes Enforcement Network (FinCEN). The bill, the FinCEN Improvement Act (H.R. 6411), wants FinCEN’s charter to specifically address cryptocurrencies.

The bill was filed by Congressmen Ed Perlmutter of Colorado and Steve Pearce of New Mexico on July 18. It would direct FinCEN to direct its efforts toward the cryptocurrency space in order to report how digital currency could be used for money laundering, terrorism or other illicit activities. FinCEN would also be tasked with working with tribal law enforcement agencies in the country, whereas before, the group’s charter covered only “appropriate Federal, State, local, and foreign law enforcement agencies.”

Another key component of FinCEN’s charter would be changed from “anti-terrorism and anti-money laundering initiatives, and similar efforts” to read “anti-terrorism and anti-money laundering initiatives, including matters involving emerging technologies or value that substitutes for currency, and similar efforts.” Pearce indicated that the new language in the charter would help FinCEN to “continue their vitally important mission in the dynamic world environment.”

Perlmutter said of the bill, “This is an important step in modernizing FinCEN and ensuring our law enforcement and intelligence communities can detect and prevent criminals and terrorist networks from using virtual currencies to move illicit funds or carry out cyber warfare.”

The bill reads, in part, “Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities in the global financial system and are increasingly using emerging payment methods such as virtual currencies to move illicit funds.”

FinCEN receives direction from the US Department of the Treasury. The organization is tasked with safeguarding “the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities,” according to its website.

It has been four years since FinCEN first published recommendations for money transmitters that work with cryptocurrencies. Any outfit that deals with crypto is required to register with FinCEN and any company offering tokens through an initial coin offering (ICO) is also required to adhere with FinCEN regulations.