WASHINGTON—Crypto companies have filed 7,100 Suspicious Activity Reports (SAR) since May, America’s anti-money-laundering (AML) chief said at a recent banking conference.
The reports, according to Kenneth Blanco, director of the Financial Crimes Enforcement Network (FinCEN), follow FinCEN’s May guidance explaining how the Banking Secrecy Act, the cornerstone of U.S. AML law, applies to the virtual currency space, CoinDesk reported.
Since then, Blanco said that in total 11,000 crypto-related SARs have been filed with FinCEN. Twenty-one hundred filers directly referenced the guidance and “dozens” of new entities filed their first report.
The high numbers indicate that virtual asset service providers (VASP) like crypto ATMs and exchanges are keeping a closer eye on potentially illicit activity moving across their network, CoinDesk said.
“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us,” said Blanco, during the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference.
Venezuela a Hotbed
Venezuela in particular appears to be a hotbed of suspicious crypto activity, Blanco said. The Latin American country with its allegedly oil-backed token, the Petro, seems to have spawned an increasing number of unregistered money services business.
Domestically, crypto companies are reporting more darknet-linked customer transactions, more scams, and more activities targeting the elderly, whose “limited knowledge” of cryptocurrency places them at higher risk, Blanco said.
CoinDesk noted Blanco said all financial institutions need to consider their crypto SAR reporting, even those who do not currently report any activity.
“If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency,” he said.