WASHINGTON—A top United States financial crimes enforcement official has directed the crypto industry to proactively blacklist “problematic” wallets even before Treasury officials order them to do so, according to a new report.
Alessio Evangelista, the associate director for Enforcement at the Financial Crimes Enforcement Network (FinCEN), stated that “too often” crypto service providers have opted to keep their heads in the sand about blatantly suspect wallets “right up until the day of an OFAC designation or criminal indictment,” according to CoinDesk.
Speaking before an audience of compliance wonks at the Chainalysis LINKS conference, Evangelista warned that virtual asset service providers are “putting their own reputation at risk” by ignoring “clearly observable red flags that they could and arguably should have taken note of long ago,” Coindesk reported.
‘Growing Concerns’
“The comments highlight federal officials’ growing concerns over crypto crime, a multibillion-dollar backwater that in some cases now threatens national security,” the publication said in its analysis. “In May, Treasury officers for the first time sanctioned a crypto mixer – an on-chain privacy tool that crypto holders use to hide their tracks – over processing assets stolen by North Korean hackers in the $620 million Axie Infinity heist.”
According to the report, Evangelista told the meeting, “These funds were stolen to support a totalitarian regime that spends its money on developing weapons of mass destruction at the expense of feeding its citizens.
Evangelista added that virtual asset service providers have an obligation to effectively police themselves.
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