FinCENdeputy director Jamal El-Hindi made his remarks throughout a speech on the Securities Industry and Financial Markets Association 20th Anti-Money Laundering (AML) and Financial Crimes Conference in New York City on Feb. 6.
FinCENreceived’t enable AML oversight to “slide backward”
El-Hindi opened his speech noting the actual complexity of the securities and futures trade, which contains a dense net of transactions and interactions between inter-related events.
This “amazingly complex” panorama consists of however is just not restricted to main brokerages, futures fee retailers, executing sellers, switch brokers, clearing companies and mutual funds, he noticed.
This complexity, he advised, presents a problem to the transparency – the knowledge assortment and due diligence processes – wanted to sort out cash laundering and forestall monetary crimes.
In many circumstances, info sharing and Know Your Customer processes could also be discouraged because of the extremely aggressive nature of the trade – simply 14% of all entities within the securities sector which might be eligible to register for one of many key business-to-business info sharing mechanisms select to take action, he famous.
Within this extremely difficult local weather, El-Hindi warned that new applied sciences might additional exacerbate the state of affairs.
Cryptocurrency-curious social media and messaging platforms – probably the most high-profile of which is Facebook’s Libra undertaking – should meet the identical compliance duties as conventional monetary sector actors, he harassed:
“Social media and messaging platforms and others now focusing on the establishment of cryptocurrencies cannot turn a blind eye to illicit transactions that they may be fostering.”
The affect of those non-public sector actors, and the brand new know-how heralded by cryptocurrencies, carries these similar duties again into conventional finance:
“To the extent that the financial sector chooses to move forward with […] these emerging systems […] we are not going to allow it to slide backward on the protections and appropriate transparency that we have collectively worked so hard to weave into the financial system.”
In early December, FinCEN’s director, Kenneth A. Blanco, claimed that the cryptocurrency trade has more and more begun to fall in keeping with the company’s rules on cash transmission companies.
In explicit, he pointed to FinCEN’s May 2019 steering as having a marked and optimistic impression on the company’s oversight of the crypto area