Financial Integrity Network urges Congress to bring crypto firms under BSA
Tue, 03 Sep 2019, 06:14 am UTC
The Financial Integrity Network (FIN), a Washington D.C.-based strategic advisory firm, has urged the United States Congress to bring firms engaged in cryptocurrency sector under the Bank Secrecy Act (BSA) regulation.
According to a transcript of FIN Vice President David Murray’s testimony, human traffickers extensively interact with the financial system and use cash, retail payment systems, online payment systems, and cryptocurrencies for carrying out their activities. This was first reported by Cointelegraph.
In order to fight human trafficking organisations, Murray made three key recommendations to the U.S. Congress, which includes strengthening cryptocurrency regulations.
“Congress should create a new class of financial institution under the BSA to cover firms involved in convertible virtual currency transactions: virtual asset service providers (VASPs), which are firms involved in convertible virtual currency transactions,” the document reads.
He recommended VASPs to be regulated on the basis of the services that they provide in order to promote system-wide governance to prevent bad actors from establishing VASPs and connections to the international financial system.
Murray noted that some VASPs are currently regulated as money transmitters under the BSA, while others are not regulated at all. He added:
“Even for those VASPs currently regulated as money transmitters, the regulations are insufficient to protect virtual assets from exploitation.”
Murray believes that imposing the proposed regulations on people and entities who perform crypto-related functions – exchanges, issuers, custodians, transaction validators, non-custodial wallets – would almost certainly “make it difficult for some existing implementations of blockchain-based payments to continue operating as they do today.”
Last month, the Middle East Media Research Institute (MEMRI) said that terrorist groups, such as ISIS, Al-Qaeda and Hamas, are increasingly using social media platforms to raise cryptocurrency. It particularly called out encrypted messaging app Telegram as the most preferred app by these terrorist groups.
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