US State Secretary Pompeo: Bitcoin (BTC) Needs Bank-Grade Regulation

Echoing the concerns of US Treasury Secretary Steven Mnuchin, US Secretary of State Mike Pompeo stated that Bitcoin (BTC) posed a terrorism and money laundering threat.

Bitcoin (BTC) needs to be as highly regulated as SWIFT, commented US Secretary of State Mike Pompeo in an interview with CNBC Squawk Box. Pompeo mentioned the terrorism threat following 9/11 as one of the chief drivers of stricter money regulation.

Pompeo’s views echo those of US Treasury Secretary Steven Mnuchin, who views BTC as a tool used to launder money much more often in comparison with fiat currency.

“Look, the risk with anonymous transactions is one that we all know well. We know this from 9/11 and terror activity that took place in the 15 years preceding that where we didn’t have good tracking, we didn’t have the capacity to understand money flows and who was moving money,” commented Pompeo.

BTC transactions are not entirely anonymous, and there are multiple techniques to track senders and receivers. However, there is no limitation to sending larger sums, unlike bank restrictions on fintech apps. While Pompeo did not name any specific digital asset, he hinted that BTC and other coins may be increasing terrorism-related money flows.

The BTC network is also one of the most widely explored by both law enforcement and startups. A chain of transactions from an exchange can link a real-world identity to a series of addresses or wallets. Analytics tools reveal networks of connections between senders and receivers, and more recently, BTC mixing services came under the blows of the law.

In 2019, the general trend is to increase oversight of digital assets, based on several threats. The US Securities and Exchange Commission is keen on tracking down sellers of tokens that are deemed to be breaking securities law. The New York Attorney General (NYAG) has fought to continue its investigation of iFinex and Tether, Inc. State attorneys also often target fraudulent crypto-related projects.

In the past year, most market operators upped their surveillance of traders, implementing KYC procedures on a wider scale. This shift in regulation arrived after years of relatively lax rules that allowed anyone to use crypto assets to hide funds transfer or avoid taxes.

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