United States set to target crypto-scam and money-laundering

Crypto scams, Money laundering

The United States Treasury Department is embarking on a significant initiative to combat crypto scams and money laundering through the unveiling of a comprehensive national illicit finance strategy. This strategic approach, outlined in a recently released document, underscores the nation’s unwavering commitment to addressing the evolving landscape of financial crimes, ranging from the surge in digital assets to the proliferation of ransomware attacks that pose significant threats to the integrity of financial systems.

Emphasizing the ever-evolving landscape of illicit finance threats, a senior Treasury official pointed to a spectrum of challenges, including scams, frauds, ransomware attacks, and the concerning opioid epidemic. These pressing issues highlight the imperative for proactive measures. The strategy is designed to address regulatory shortcomings, enhance cooperation between law enforcement entities and global partners, and initiate a process of updating anti-money laundering policies. By undertaking these endeavors, the aim is to stay ahead of emerging threats and bolster the effectiveness of efforts to combat financial crimes.

Central to this initiative is the operationalization of the country’s new beneficial ownership information database, a pivotal tool launched by Treasury’s financial crimes unit, FinCEN, earlier this year. This database, designed to enhance transparency, aims to unmask the true owners of companies, thereby facilitating efforts to unravel complex corporate structures and hold perpetrators of financial crimes accountable for their actions.

Furthermore, Treasury is committed to bolstering compliance guidance for financial institutions, equipping them with the necessary tools and resources to navigate the evolving landscape of illicit finance. Additionally, significant investments will be made in training programs aimed at empowering analysts and regulators to effectively address emerging threats posed by cryptocurrencies, including the insidious “pig butchering scams” that prey on unsuspecting individuals with elaborate narratives designed to lure them into high-risk cryptocurrency investments.

Additionally, the strategy shines a light on vulnerabilities present within the real estate market, notably the widespread occurrence of all-cash transactions, a loophole frequently exploited by criminals and corrupt entities for laundering illicit funds. Recent endeavors by federal prosecutors to confiscate properties obtained through dubious methods underscore the government’s resolve to crack down on illicit real estate dealings and dismantle the channels through which dirty money circulates.

Earlier this year, FinCEN introduced a proposed rule aimed at shedding light on nefarious actors involved in purchasing residential properties using cash or opaque legal entities. The primary goal is to enhance regulatory oversight and combat illicit activities within the real estate sector. While the initial emphasis is on residential properties, future plans involve extending this scrutiny to commercial real estate transactions. By doing so, FinCEN seeks to close existing loopholes and fortify the financial system against potential abuse, ultimately bolstering its resilience against criminal activities.

In parallel, the Treasury is directing attention towards investment advisers, a sector that has traditionally operated without stringent anti-money laundering (AML) requirements. A newly proposed rule aims to compel specific investment advisers to establish comprehensive AML programs and disclose suspicious activities. This initiative aligns investment advisers with the regulatory standards already in place for banks and financial institutions. By extending AML obligations to this sector, the Treasury aims to enhance financial transparency and mitigate the risk of illicit financial activities within investment practices.

Gary Kalman, executive director of Transparency International US, emphasized the urgency of promptly completing regulations for investment advisers. This step is crucial to prevent inadvertent facilitation of illicit activities by ensuring advisers are equipped to identify and deter nefarious actors.

In summary, the United States Treasury Department’s proactive efforts to combat crypto scams and money laundering underscore its unwavering dedication to preserving the integrity of the financial system. Employing a multifaceted strategy that prioritizes transparency, cooperation, and modernization, the Treasury strives to anticipate and thwart evolving threats. By doing so, it aims not only to protect financial institutions but also to ensure accountability for those involved in illicit financial activities.


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