The U.S. Treasury Department is pushing for new rules that seek to make convertible cryptocurrencies like bitcoin less attractive to criminals.
The Financial Crimes Enforcement Network, a unit within Treasury that guards against money laundering, on Friday said it is proposing new requirements that would compel banks and some other institutions to maintain records and submit reports to verify customer identities for certain transactions.
“The rule, which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement, and increase transparency while minimizing the impact on responsible innovation,” Treasury Secretary Steven Mnuchin said in a statement.
U.S. authorities, according to the statement, have found that “malign actors are increasingly using CVC to facilitate international terrorist financing, weapons proliferation, sanctions evasion, and transnational money laundering, as well as to buy and sell controlled substances, stolen and fraudulent identification documents and access devices, counterfeit goods, malware, and other computer hacking tools, firearms, and toxic chemicals. In addition, ransomware attacks and associated demands for payment, which are almost exclusively denominated in CVC, are increasing in severity.”
“CVC” stands for “convertible virtual currency” – a category of digital products that can serve as currency. This functions as a medium of exchange, a unit of account, and/or a store of value. Bitcoin is an example.
Mnuchin said the proposed rule “addresses substantial national security concerns in the CVC market and aims to close the gaps that malign actors seek to exploit in the record-keeping and reporting regime.”
The rule, which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement and increase transparency while minimizing the impact on responsible innovation, according to Mnuchin.
