US Treasury Official Calls on Crypto Industry Players to Combat Illicit Use of Crypto


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                A U.S. Department of the Treasury official has urged crypto industry players to jointly fight against fraudulent activity and the misuse of digital currencies.
                <p dir="ltr">The <a href="">U.S.</a> Department of the Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker urged crypto industry players and regulators to prevent the illicit use of cryptocurrencies in a <a href="" rel="nofollow,noopener" target="_blank">speech</a> Dec. 3.</p><p dir="ltr">Speaking at the Financial Crimes Enforcement Conference on Dec. 3, Mandelker addressed the issue of mitigating risks related to emerging technologies, including <a href="">digital currencies</a>, which could potentially be used for nefarious purposes.</p><p dir="ltr">Mandelker stressed that financial institutions and cryptocurrency services providers must combat illicit activity and the risks of assisting bad actors. &ldquo;The digital currency industry must harden its networks and undertake the steps necessary to prevent illicit actors from exploiting its services,&rdquo; she said.</p><p dir="ltr">Mandelker also called on international regulators to strengthen anti-money laundering (<a href="">AML</a>) and Combating the Financing of Terrorism (CFT) frameworks in regards to digital currencies. Additionally, the Mandelker stressed the importance of supervision and enforcement of AML and sanctions obligations. Mandelker added:</p><blockquote><p dir="ltr">&ldquo;The lack of AML/CFT regulation of virtual currency exchangers, hosted <a href="">wallets</a>, and other providers &mdash; and, indeed, of the broader digital asset ecosystem &mdash; across jurisdictions exacerbates the associated money laundering and other illicit financing risks.&rdquo;</p></blockquote><p dir="ltr">The call to action followed a new approach that the agency took last week to target illicit actors, who deployed cryptocurrencies and other new technologies in order to launder and transfer ill-gotten funds. The cyber criminals allegedly used malware called &ldquo;SamSam,&rdquo; that affected over 200 victims, including state organizations and public institutions.</p><p dir="ltr">&ldquo;As part of this scheme, two <a href="">Iranian</a> financial facilitators helped exchange the <a href="">Bitcoin</a> ransom payments into Iranian rial for the hackers. Last week, those two financial facilitators <a href="">found themselves</a> on OFAC&rsquo;s Specially Designated Nationals and Blocked Person&rsquo;s (SDN) list. &nbsp;For the first time ever, OFAC attributed digital currency addresses associated with designated individuals,&rdquo; Mandelker said.</p><p dir="ltr">Meanwhile, the Estonian Ministry of Finance <a href="">announced</a> it will shortly add amendments to a recently-passed financial bill that are meant to &ldquo;tighten&rdquo; crypto-related regulation. The regulation reportedly introduces &ldquo;virtual currency exchange service providers&rdquo; and &ldquo;virtual currency payment service providers,&rdquo; while before there only was &ldquo;alternative means of payment service provider.&rdquo;

Today, the Department of Financial Services of New York (NYDFS) authorized a blockchain-based digital platform offered by a local Signature Bank. The system purportedly allows funds “to be transferred in real-time between two commercial clients of Signature Bank, eliminating any dependence on a third party.”

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