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Crypto industry clamps down on suspicious activities

By Charlotte Ricca

US Enforcement network FinCEN has received 7,100 suspicious activity reports since May

The cryptocurrency industry plans to clamp down on crime, with the help of new regulations from the Financial Crimes Enforcement Network (FinCEN).

Since FinCEN, part of the US Treasury Department, issued its convertible virtual currency (CVC) advisory in May, crypto companies have filed 7,100 suspicious activity reports (SAR), two thirds of the total number of SARs received.

According to Kenneth Blanco, director of FinCEN, before the advisory was issued, crypto filings accounted for around half of the SARs received. Since November 2019 more than 2,100 unique filers have referenced the advisory key guidelines.

“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us,” he said.

Trends in the filings reveal an increase from exchanges that identify potential unregistered, overseas money services businesses (MSBs) — specifically, Venezuela-based peer-to-peer exchangers.

There has also been increased reporting of customers conducting crypto transactions linked to darknet marketplaces, as well as scams aimed at vulnerable victims, with limited knowledge of CVC, such as the elderly.

“I think it is important for all financial institutions to ask themselves whether they are reporting such suspicious activity,” Blanco said. “If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.

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