US Sets Up Crypto Exchange Information Sharing Program

The US Treasury Department is working on a platform that will enable reporting of suspicious activities within the crypto industry.

The US Treasury Department is developing a special information sharing platform for cryptocurrency exchanges that would facilitate the reporting of illegal operations, Kenneth Blanco, Director of the US Financial Crimes Enforcement Network (FinCEN), said on Thursday.

The FinCEN chief called on the cryptocurrency industry to be more active in cooperating with authorities because this not only protects investors, but also stamps out ‘negative perceptions of virtual currency as the coinage of the dark web and bad actors.’

The new platform will be similar to the FinCEN Exchange program for traditional trading operators, FinCEN chief explained during the 2018 Chicago-Kent Block (Legal) Tech Conference. In December last year, FinCEN, which is an agency of the US Treasury Department, introduced an information platform for cooperation between fiat exchanges and regulators. It functions as a place for regular operational briefings with federal law enforcement agencies. The platform focuses on combating money laundering, terrorism financing, and other financial crimes.

Currently, FinCEN receives around 1,500 Suspicious Activity Reports (SARs) related to cryptocurrency every month, most of them coming from digital coin industry representatives, Blanco outlined. The number is a significant increase since 2014 when FinCEN issued a package of administrative rulings that put cryptocurrency exchanges under the scope of the agency, including the non-US-based trading platforms. The body has various anti-money laundering (AML) and combating financing of terrorism (CFT) rules.

The agency along with the Internal Revenue Service (IRS) examined over 30% of the registered digital coin exchanges and operators in the last four years, FinCEN Director noted.

The FinCEN chief revealed that the agency will chair a forum of the Egmont Group, the body of more than 155 financial intelligence units worldwide, and one of the focuses will be cryptocurrency as part of the FinCEN efforts to draw attention to sector-related risks.