Mnuchin: Crypto businesses must submit to regulation
A widely anticipated stance has been taken by the U.S. Treasury on July 15, and the cryptocurrency world is slowly realizing the implications of what has been said. Secretary of the Treasury Steven Mnuchin took to the dais and clearly laid out a stance that will not permit unregulated and illicit crypto activity.
In the six-minute statement, Mnuchin made it clear that while the U.S. isn’t anti-crypto, there are a lot of problems that the Treasury believes need to be fixed, and fast. He laid out the department’s “serious concerns the treasury has on the growing misuse of virtual currencies by money launderers, terrorist financiers and other bad players.”
This comes just days after U.S. President Donald Trump, who has not often discussed the topic of crypto, suddenly tweeted about the topic:
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Mnuchin helped clarify that statement and spell out exactly what illegal activity Trump was referring to when discussing SegWitCoin (BTC) and other dark coins:
“The treasury department has expressed very serious concerns that Libra could be misused by money launders and terrorist financiers. Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, human trafficking. Many players have attempted to use cryptocurrencies to fund their maligned behavior. This is indeed a national security issue.”
The way forward is now pretty clear. Digital currencies and money service operators have to start adhering to the same rules as everyone else, or they will be running from the law. “They must implement the same anti-money laundering (AML) and counter-financing of terrorism (CFT)… safeguards as traditional financial institutions,” Mnuchin said.
Many have laughed at the notion that cryptocurrency exchanges and dark coin payment systems should even be concerned with current laws. However, as those with more knowledge on the matter have been saying, regulators already have this covered. Mnuchin explained.
“FinCEN (Financial Crimes Enforcement Network) implements the bank secrecy acts regulation, and has federal regulatory, supervisory and enforcement authority over money service authorities and banks. The rules governing money service providers apply to physical and electronic transactions alike. As money service businesses, cryptocurrency money transmitters are subject to compliance examinations just like every other U.S. bank. To be clear, FinCEN will hold any entity that transacts in Bitcoin, Libra, or any other cryptocurrency to its highest standards.”
This is great news for Bitcoin, now championed by Bitcoin SV (BSV), as it has consistently taken the track that digital currencies need to follow local laws, not just to avoid being banned outright, but to create the best chances for global adoption. That hasn’t made BSV the favorite digital currency of libertarians who want to escape the rules of society, but it’s the most sensible position to take.
This is not great news for crypto businesses and exchanges, like Binance, who have opted to ignore sensible regulations and permit open money-laundering on their platforms. In the case of the world’s biggest dark coin exchange, it appears its recent decision to leave the U.S. might not save it either, “Given the international nature of cryptocurrencies, we are also going to great lengths to ensure that effective regulation does not stop here at the U.S. border,” Mnuchin stated.
Mnuchin’s statement was clearly a shot at the illegal activity already happening on the BTC blockchain and in the corners of the internet that prefer dark coins. It won’t be a problem for BSV though, as it will work to satisfy every regulatory need world governments put forward. That should work well for the U.S. government. “To be clear, the U.S. welcomes responsible innovation, including new technologies that may improve the efficiency of the financial system and expand access to financial services,” Mnuchin concluded.
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