US FinCEN Lists Cryptocurrency as a National Priority

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released its first government priority list on Wednesday. FinCEN identified eight priorities, including corruption, cybercrime involving virtual currencies, terrorist financing, fraud, transnational criminal organization activities, drug trafficking, human trafficking and counter-proliferation financing of weapons of mass destruction.

FinCEN considers virtual currencies “a significant financial innovation” but says they are the “preferred payment method” for a variety of illegal activities, including ransomware, illegal drugs, and even “used by some of the most advanced threat actors to facilitate their illegal activities and nuclear weapons ambitions.”

According to FinCEN’s statement, the agency will later issue regulations specifying how financial institutions should incorporate these priorities into their risk-based AML (anti-money laundering) programs.

FinCEN has been grappling with its approach to cryptocurrencies since late 2020, when the Treasury Department proposed a controversial rule that would have required cryptocurrency exchanges to identify individual wallets conducting large transactions.

FinCEN’s move to include virtual currencies and cybercrime on its priority list follows several high-profile ransomware attacks, such as the Colonial Pipeline hack, in which criminals used Bitcoin as a form of payment.

“Treasury is particularly concerned about cyber-enabled financial crime, ransomware attacks, and the misuse of virtual assets to exploit and undermine their innovative potential, including to launder illicit proceeds,” FinCEN said in a statement.