Anti-Money Laundering Forces now Focusing on Crypto Space

Kenneth Blanco, the director of Financial Crimes Enforcement Network (FinCEN) of the United States recently presented his stance about money laundering in crypto stating that the anti-money laundering (AML) laws apply to everything and everyone. He specifically addressed the crypto space saying that all the firms that provide anonymity to crypto users should take these AML laws into consideration.

Illicit activities have always been a major concern in the crypto space, but these unfortunate things come in the package along with all the other fruitful aspects of blockchain and crypto which include transparency, anonymity, decentralization, high-speed transaction with low fee, etc. Zero-knowledge proofs have although provided users with confidence but they have also facilitated the illicit minds of the crypto space. This is the reason why the dark web uses crypto as a payment method instead of a traditional fiat, because of the difficulty to track it. Kenneth Blanco majorly had his concerns related to these identity concealing firms, which not only conceal the identities of regular users but also hide criminal activity unknowingly. He demanded that these currencies should allow tracking so that all these activities can be traced. He said:

There is a reason you want to know … the person on the other side of that transaction — they might be dealing in some kind of illicit activity. Whether it’s opioids … or human smuggling on the other side … you want to know who that person is.

READ ALSO: Another Lawsuit Resulting in Loss of Cryptocurrencies Due to SIM Swapping Filed Against AT&T

He also stated that FinCEN merely demanded the “, address, account number, transaction, recipient, and amount.” It is to be noted here that if government authorities have access to all this information, will it take away the gist of blockchains and crypto? Which was supposed to be a financial system on its own, free from government and authorities? He further stated making his case:

So when you tell me you don’t know who’s on the other side, you’ve got a big problem. Because you are required to know, and that is what our expectation is going to be.

Not only FinCEN, but the intergovernmental body FATF also raised its concerns about money laundering related to stablecoins and Libra (Facebook’s upcoming digital currency). According to them, releasing projects like Libra and other stablecoins on such large scales would not only hinder the processes of detection of money laundering and terror financing, but the mass adoption due to the huge amount of users of Facebook would make the situation go out of hand. The president of FATF stated in an interview:

If stablecoins were to become widespread, it could potentially lead to new risks regarding money laundering and terrorist financing.

READ ALSO: Libra Further in Trouble as FATF Raises Money Laundering Concerns

Another point to be noted here is that FinCEN was directed by Congress to research into blockchain technology and find the loopholes. Congress has also become very active and has raised its concerns about Libra and how its financial system would tackle the downsides that crypto brings. Telegram’s native blockchain TON has also fallen prey to the SEC who has asked Telegram to halt operations related to TON and has blamed them for illegal ICO of $1.7 billion.

READ ALSO: Zuckerberg Vs Congress 2.0 – Testifying for Project Libra

With the crypto boom in place with projects like Libra and TON emerging, what makes Congress and other bodies like SEC, FATF and FinCEN so concerned all of a sudden? Are these the signs of regulations coming to the crypto space? Only time will tell.

Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: or contact the editor at

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