US regulators to act against illegal use of crypto

The US law enforcement and regulatory agencies have set a Cryptocurrency Intelligence Program.

The proposal states that the program will seek to identify unlicensed crypto capital flows taking place across peer-to-peer marketplaces, online forums, crypto exchanges, blockchain-based mobile devices and darknet markets.

Furthermore, law enforcers are proposing new regulations and tax reporting requirements to pave the way for the widespread adoption of blockchain technology. These actions follow the United States’ concerns about the rise of cryptocurrency use in illegal activities.

For instance, the US Department of Justice recently charged two Chinese nationals with laundering over USD 100 million worth of cryptocurrencies via 113 virtual currency accounts from a hack of a cryptocurrency exchange by North Korean actors that were trying to evade US sanctions.

The DoJ also announced that the dark net’s ‘go-to’ money launderer, who acted as a ‘Bitcoin mixer’ — soliciting USD 300 million in crypto from criminals, slicing and dicing the coins, and then remixing them to obscure their source — was indicted.

However, to avoid detection, criminals use cryptocurrency tumblers such as Cloakcoin, Dash, PIVX, and Zcoin, which have built-in mixing services as a part of their blockchain network.

Still, in February 2020, the US Treasury Secretary Steven Mnuchin told the Senate Finance Committee that his agency’s investigative arm would soon introduce stricter regulations around digital currencies to help expose ‘secret’ accounts and other nefarious activities.