Director of US Financial Crimes Enforcement Network (FinCEN) Kenneth A. Blanco delivered a speech on August 9th at the 2018 Chicago-Kent Block Legal Tech Conference, wherein he cited a recent surge in crypto-related Suspicious Activity Reports (SARs). According to FinCEN’s data, the average number of monthly SAR complaints has now risen to over 1,500.

“We now receive over 1,500 SARs per month describing suspicious activity involving virtual currency, with reports coming from both MSBs in the virtual currency industry itself and other financial institutions,” said Blanco, who emphasized that greater support in this area is needed to protect further innovation in the space.

“We see the industry developing new techniques for identifying suspicious activity in virtual currency, showing us what is possible and giving us unique insight into certain financial crimes. By helping us identify and investigate this illicit activity, the industry can focus on legitimate applications and innovations, and stamp out negative perceptions of virtual currency as the coinage of the dark web and bad actors.”

Blanco stated that FinCEN and other cyber defense programs offered by the US Treasury are actively working to develop information sharing programs to help the financial services sector defend itself from future threats.

“We are continuously developing our technological capabilities and expertise to remain in step with the evolution of industry as well as the threats that persistently seek to take advantage of new vulnerabilities.”

Despite the negative reports, Blanco’s speech provided reassurance that FinCEN recognizes the innovation taking place in the world of virtual currency. He affirmed that innovation in financial services can be a great thing. Virtual currencies and their developments are offering customers greater access to a wide range of financial services at faster speeds than ever before. However, despite the efficiency and security of the blockchain technology underlying virtual currencies, new forms of cyber crime are sprouting up on a regular basis.

 “Nobody here today wants to see innovative products and services misused to support terrorism, facilitate child exploitation, or become another vehicle for criminals to carry out fraud, identity theft, corruption, or extortion.  There are already too many victims out there who may never be made whole again, and harm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world. Our role at FinCEN is to protect and secure our financial system from those who seek to misuse important technological advancements for nefarious purposes—harming victims while undermining trust in our financial system upon which innovation and our country prosper.”

Blanco concluded his speech by stating that FinCEN will continue to aggressively pursue bad actors in the space and persist in providing updated guidance relating to emerging technology to support responsible innovation.

“We are focused on swiftly and continuously building our capabilities and understanding in the emerging technologies space to (a) rapidly identify risks, (b) close gaps, and (c) support responsible innovation through clarity.”

The post FinCEN Director Reports Surge in Crypto-Related Suspicious Activity, Still Supports Digital Currency Innovation appeared first on UNHASHED.

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