Blockchain Intelligence and BSA/AML

"How do we build a regulatory framework that creates the room to foster what’s positive about innovation while at the same time ensuring that bad actors can’t take advantage of innovations more effectively than the good guys?” —Him Das, Acting Director of FinCEN

There is a common misconception that the crypto sector is unregulated and rife with illicit activities.1 In fact, the risk controls inherent in blockchain technology make it far less likely for firms to engage in misconduct without being identified and traced. While we often hear crypto referred to as the Wild West, the truth of the matter is that most cryptocurrency businesses in the U.S. – from exchanges to brokers, custodians to ATMs – are regulated just like other money service businesses (MSBs). In fact, any transfer of value is subject to the Bank Secrecy Act (BSA), the U.S. anti-money laundering framework. The BSA was passed by Congress in 1970. It was perhaps the first law of its kind and designed to fight money laundering by organized crime. The BSA required that banks record and report transactions equal or greater than $10,000.