US Treasury Urging Improvements on Global Cryptocurrency Regulations

Feb 15, 2018 at 18:51

The United States Treasury’s Office of Terrorism and Financial Intelligence called on the international community for stronger cryptocurrency regulations to protect financial systems and overall national security.

In a speech during a conference, the department’s undersecretary, Sigal Mandelker cited that Venezuela’s recent introduction of the petro cryptocurrency may serve as a signal to strengthen regulations to discourage the exploitation of financial systems and funding of illicit activities through virtual currencies.

“Currently, we are one of the only major countries in the world, along with Japan and Australia that regulate these activities for anti-money laundering and combatting the financing of terrorism purposes. But we need many more countries to follow suit, and have made this a priority in our international outreach,” she expressed in a speech during the Securities Industry and Financial Markets Association Anti-Money Laundering and Financial Crimes Conference.

Mandelker also cautioned that the $110 million penalty levied at cryptocurrency exchange BTC-e last year for failing to register as a money transmitter is a proof of the department’s willingness to aggressively enforce regulation.

“The company lacked basic controls to prevent the use of its services for illicit purposes. As a result, they emerged as one of the principal means by which cyber criminals around the world laundered the proceeds of their illicit activity, facilitating crimes such as computer hacking and ransomware, fraud, identity theft, tax refund schemes, public corruption and drug trafficking,” the official further explained.

Likewise, she also encouraged global regulators to improve their efforts in preventing financial crime and the protection of national security. She also stated that companies must add actions against money laundering and the financing of terrorism in countries without regulation or with weak enforcement of regulations.

“The expectations you set for your customers, counterparties, and the countries in which you operate are critical to ensuring the transparency of the international financial system and keeping bad actors out,” Mandelker told representatives of cryptocurrency companies and exchanges during the conference.

Earlier, the International Monetary Fund said that regulations on cryptocurrencies on an international level will become inevitable as its use continue to become massive globally.