FinCEN proposes designating crypto mixers as money-laundering concern

The Financial Crimes Enforcement Network issued a proposed rule that identifies international convertible virtual currency mixing as a primary money-laundering concern.

Details: The proposal spotlights the risks posed by the use of CVC mixing by various illicit actors, including Hamas, Palestinian Islamic Jihad, and North Korea. It follows previous Treasury Department actions to target illicit finance involving mixing services.

Comment Deadline: Comments on the proposal are due within 90 days of publication in the Federal Register. ICBA is reviewing the proposal and will submit comments.

More: The FinCEN proposal comes a day after Treasury’s Office of Foreign Assets Control announced sanctions on a virtual currency exchange for financing terrorist operations and a separate bipartisan congressional letter calling on the administration to provide details on plans to prevent the use of crypto for financing terrorism.

ICBA View: ICBA has repeatedly called on policymakers to ensure new policies directed at the crypto sector fully reflect its risks, including to national security. A new ICBA blog post recaps the significant upheaval in the digital assets market over the past year, including North Korea’s use of crypto mixers to fund illicit weapons programs.