US Congress has passed this week the “Advancing Innovation to Assist Law Enforcement Act.” The Act is requiring the financial crime watchdog, Financial Crimes Enforcement Network (FinCEN), to study the use of blockchain technology in the digital world.
More specifically, the director of FinCEN has been directed to conduct a thorough study on the implementation and use of blockchain technology in order to improve the existing safeguarding mechanisms for the prevention of financial crimes. The watchdog is essentially being asked to report back the feasibility of utilizing cutting edge technologies such as AI and blockchain so that data collection and data analytics could become more efficient.
The bill was presented to Congress by freshman Representative Anthony Gonzalez (R) from Ohio, a member of the House Financial Services Committee, introducing the bill in May as a sophisticated technological means to fight financial crimes.
Gonzalez stated that the proposed bill would make sure that state-of-the-art technology is being used to identify and prohibit various financial crimes including money laundering. Most of the efforts of FinCEN and other crime watchdogs are focused on preventing the ruinous activities of drug cartels, traffickers and terrorists. FinCEN has spent considerable time spreading awareness among various sectors of the industry to inform the stakeholders about the potential threats they face by these criminal segments.
As reported previously, FinCEN Director Kenneth Blanco has asked several casinos to adhere to the guidelines of the watchdog to fight crimes related to convertible virtual currency (CVC). In a detailed message, he urged the casino administrations to consult with the documentation provided on FinCEN’s website to ensure that the casinos are filing SARs whenever they identify suspicious activity with regards to CVC.
He further acknowledged the high rate of financial crimes reported by casinos who are frequently become the targets of cyber and cyber-enabled criminal activity. These attacks include “ransomware attacks and business e-mail compromise schemes.”
Studying Crypto and Blockchain Technology
The FinCEN Director was called upon stage by the US House of Representatives where he briefed members of the house about the potential threats that financial sectors could face if Facebook’s Libra gets approval. The current trends in financial crimes suggest a possible rise in money laundering and illicit financing activities if Libra goes public.
In lieu of the situation were cryptocurrencies and blockchain technology have become subject of intense scrutiny, Congress passed the “Advancing Innovation to Assist Law Enforcement Act” on 19th September. It was passed onto the Senate on 23rd September for further scrutiny. What comes out of the Senate’s proceedings remains to be seen.
