Banks Warned about Cryptocurrency Risk Exposure by FinCEN Director


During a virtual anti-money laundering conference by ACAMS in Las Vegas earlier this week, FinCEN Director Kenneth Blanco warned banks about the cryptocurrency exposure. He also discussed the banks’ obligations for effective AML policies. 

According to the current FinCEN policies (FIN-2019-A003), all financial institutions are responsible for identifying and reporting suspicious activities regarding fraudsters exploiting identity verification checks for money laundering, sanctions eluding, and other financing purposes. Many banks are still confused about how virtual money can affect their organization. 

Blanco emphasized upon the banks’ reconsideration of AML policies and further said that banks’ leniency will be spotted when examiners visit.

Eight out of ten major retail banks in the US were dealing with illicit crypto money service businesses or MSBs, according to a 2019 research. These MSBs exchange cash for crypto and run unregistered P2P exchanges. Furthermore, the majority of P2P exchanges have no programs for KYC or AML, which risks banks and other financial institutes. 

ICJI reports that banks have identified more than $2 trillion transactions as suspicious and must be frozen. The unidentified transactions may be many times larger than two trillion dollars. 

Learn more at Challenges of AML Compliance under FinCEN