NEW YORK—The U.S. government will strictly enforce a rule that requires cryptocurrency firms engaged in money service businesses such as digital asset exchanges and wallet service providers to share information about their customers, according to the Financial Crimes Enforcement Network (FinCEN).
Part of anti-money laundering regulations, the “travel rule” requires cryptocurrency exchanges to verify their customers’ identities, identify the original parties and beneficiaries of transfers $3,000 or higher, and transmit that information to counterparties if they exist, Reuters reported.
“It (travel rule) applies to CVCs (convertible virtual currencies) and we expect that you will comply period,” FinCEN’s Kenneth Blanco said during a conference hosted by Chainalysis, a New York-based blockchain analysis company. “That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new,” he added.
The U.S. government’s moves are coming as cryptocurrency crime soared into the billions of dollars, with global investigators grappling with major money laundering hubs that are at the center of the virtual worlds. CipherTrace, in a recent report released in August, said cryptocurrency thefts, scams, and fraud may exceed more than $4.3 billion this year, Reuters noted.