The US Treasury Department Targets Crypto Mixers to Combat Money Laundering
The US Treasury Department is taking action against crypto mixers, labeling them a “primary money laundering concern” in an effort to crack down on terrorist groups that have been using cryptocurrency to raise funds. This move comes after the recent attack on Israel by Hamas and aims to tighten controls on crypto funding by rogue actors.
FinCEN, the department’s Financial Crimes Enforcement Network, announced this initiative as its first-ever use of Section 311 authority to target transactions involving Convertible Virtual Currency (CMC) mixing. According to FinCEN director Andrea Gack, crypto mixers enable individuals involved in ransomware operations, state-sponsored actors, and other criminals to finance their illegal activities and hide their illicit earnings.
Crypto Mixers Threaten National Security
FinCEN emphasizes the importance of transparency around international CVC mixing to combat money laundering and protect national security. This initiative aligns with the Treasury Department’s efforts to counteract the actions of groups like Hamas and Palestinian Islamic Jihad, who engage in violence against innocent civilians.
The Treasury Department has been taking multiple actions to combat illicit financial activities involving mixing services. These actions are prompted by the increased use of technologies that provide anonymity, including CVC mixing, which criminals utilize to hide the origin and movement of funds.
In August, the Treasury Department sanctioned virtual currency mixer Tornado Cash for laundering over $7 billion worth of virtual currency since its creation in 2019. This included more than $455 million stolen by North Korea’s Lazarus Group in the largest known virtual currency heist to date.
Hot Take: The Fight Against Money Laundering in Crypto
The US Treasury Department’s decision to label crypto mixers as a primary money laundering concern demonstrates the government’s commitment to combatting illicit financial activities in the cryptocurrency space. By targeting these mixing services, the Treasury aims to disrupt the funding of terrorist groups and other criminal organizations that rely on crypto for their operations.
While this move may raise concerns among privacy advocates, it underscores the need for greater transparency and regulation in the crypto industry. By implementing stricter controls on CVC mixing, authorities can prevent criminals from exploiting anonymity to launder funds and finance illegal activities. This action serves as a reminder that crypto platforms must prioritize compliance with anti-money laundering measures to ensure the integrity of the financial system.
Sources:
https://www.fincen.gov/news/news-releases/fincen-proposes-new-regulation-enhance-transparency-convertible-virtual-currency
https://www.fbi.gov/news/press-releases/press-releases/fbi-statement-on-attribution-of-malicious-cyber-activity-posed-by-the-democratic-peoples-republic-of-korea
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