A new Congressional bill would update the mandate of the Financial Crimes Enforcement Network (FinCEN) to include a specific focus on cryptocurrencies.
The FinCEN Improvement Act (H.R. 6411), filed jointly by U.S. Congressmen Ed Perlmutter (D-CO) and Steve Pearce (R-NM) on July 18, directs FinCEN to look into how cryptocurrencies might be used in terrorism or other illegal activities, in addition to working with tribal law enforcement agencies and other terror financing schemes.
Specifically, it includes language reflecting “matters involving emerging technologies or value that substitutes for currency, and similar efforts.”
“Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities in the global financial system and are increasingly using emerging payment methods such as virtual currencies to move illicit funds.”
FinCEN, which operates under the U.S. Treasury Department, is set to “safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities,” as stated on its website.
Pearce said in a news release that the new directives would “ensure” FinCEN’s ability to “continue their vitally important mission in the dynamic world environment.”
The proposed bill comes years after FinCEN first published guidance for money transmitters working with cryptocurrencies. Firms in the U.S. that undertake such activities are required to register with FinCEN, and more recently, the agency said that exchanges which handle tokens sold during initial coin offerings (ICOs) must also comply with its regulations.
“This is an important step in modernizing FinCEN and ensuring our law enforcement and intelligence communities can detect and prevent criminals and terrorist networks from using virtual currencies to move illicit funds or carry out cyber warfare,” Perlmutter said last week.