Authorities in US aims to trace digital currency payments

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Compulsory record keeping and mooted monitoring. 

As per current fiat money legislation, the United States Treasury plans to enact laws that will force financial institutions and money service providers to file reports and maintain data on digital currency transfers, together with monitoring their users. 

The US Treasury’s Financian Crimes Enforcement Network  (FinCEN)  released a notification of draft regulations on the issue, referencing ransomware transfers and cryptocurrency robberies by nation-state entities including the Lazarus Group. 

FinCEN stated it aims to counter offenders’ illegal use of digital currency by establishing a reporting requirement on purchases of – for instance – Bitcoin and Ethereum for banks and financial firms. 

The new legislation would refer to cryptocurrencies in hosted or unhosted wallets, FinCEN stated.

If an user exchanges a digital currency with a valuation of US$10,000 or more, FinCEN will be entitled to report with banking firms. 

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Digital currency trading and exchange organizations will also be liable to awareness of your customer (KYC) laws for purchases larger than US$ 3,000 with required record keeping. 

FinCEN agreed that certain anonymity enhancement protocols for digital currencies such as Monero, Zcash, Dash, Komodo and Beam present extremely devastating illicit finance problems as they use different technology to make it difficult to track payments through blockchain data. 

The US Bank Secrecy Act (1970) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Impede Terrorism Act are the legislative basis for the laws (2001) (2001). 

FinCEN given 15 days to feedback on its latest anti-money laundering and terrorism funding rules over the Christmas holidays.

As a component of a continuing initiative by authorities to trace digital currency transfers used among offenders, the US Department of Justice released its blockchain compliance policy in October this year.

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