U.S. Treasury Pushes Updated Guidelines for Crypto Companies

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In Brief
  • The guidelines are an attempt from the Biden administration to combat the problematic uses of cryptocurrencies.

  • September marked the first instance the Treasury sanctioned a crypto exchange for ransomware affiliation.

  • These new guidelines are applicable to most actors in the crypto space from exchanges and miners to large financial institutions.

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The Trust Project is an international consortium of news organizations building standards of transparency.

The Treasury issued a series of guidelines or best practices for businesses and major actors operating in the crypto space. 

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These guidelines follow a continuous crackdown on the crypto space while regulators mull over industry-wide regulations and increase cybersecurity protocols. Ari Redbord, former senior Treasury advisor said, “this is the beginning of a concerted effort, a shock-and-awe campaign around ransomware.”

According to Redbord the Treasury’s Office of Foreign Assets Control kept sanctions-compliance principles and practices in mind creating the guidelines. Moreover, many of said guidelines have a longstanding place in other business arenas but are now tailored specifically for crypto.

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Key features of the guidelines include: 

  • Geolocation tools for the assistance in identification and blockage of IP addresses from countries under sanctions.
  • The monitoring of transactions for identification and investigation of cryptocurrency transactions with sanctioned parties.
  • Lastly, period “look-backs” at transactions if the Treasury’s sanctions unit adds a new crypto address to the blacklist. 

Along with the guidance report, the Treasury’s Financial Crimes Enforcement Network (FinCEN) also released a document that identifies ransomware trends in anti-money-laundering law data. According to FinCEN banks reported almost $600 million in possible ransomware payments in the first six months of the year. 

Cybersecurity, ransomware, and crypto compliance 

Around mid-September, the Treasury sanctioned a digital currency exchange for the first time. The Russian-owned exchange Suex came under suspicion for its alleged affiliation with ransomware payment laundering. 

Less than a month later, the U.S Department of Justice announced the creation of a cryptocurrency crime “enforcement team.” The team’s primary focus is on criminals targeting crypto marketplaces and digital currencies involved with money laundering and narcotics sales.

Moreover, the Biden administration has made many calls for more intensive oversight on cybersecurity and ransomware research. Senator Elizabeth Warren drafted the “Ransomware Disclosure Act” in October, which gives those affected by such attacks a liability to inform officials. 

Along with heightened awareness of cybersecurity protocols, the guidelines will guide crypto-centric businesses towards better compliance practices as new regulations fall into place. 

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Savannah Fortis is a multimedia journalist covering stories at the intersection culture, international relations, and technology. Through her travels she was introduced to the crypto-community back in 2017 and has been interacting with the space since.

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