Social media crypto firms should not ignore money laundering risks, said Jamal El-Hindi, head of Financial Crime Enforcement Network (FinCEN).

The official made this statement during SIFMA’s Anti-Money Laundering conference held in New York on February 6.

El-Hindi said the social media crypto firms should safeguard their systems and be alert about illegal transactions.

In addition, the social media networks must comply with the same obligations as conventional players in the financial sector.

The director stressed:

“Social media platforms and others now focusing on the establishment of cryptocurrencies cannot turn a blind eye to illicit transactions that they may be fostering.”

The influence of these private players and the new blockchain technologies bear the same responsibilities in traditional finance:

“To the extent that the financial sector chooses to move forward with these emerging systems, we are not going to allow it to slide backward on the protections and appropriate transparency that we have collectively worked so hard to weave into the financial system.”

In December, FinCEN Director Kenneth Blanco said the cryptocurrency companies are increasingly complying with the agency’s money transfer regulations.

FinCEN keeps bird’s eye on crypto firms

The agency will closely oversee any entity seeking to enter the global financial system. Moreover, it will review whether the companies seeking to enter the cryptocurrency realm abide by the applicable regulations.

Libra Association, an independent entity governing the proposed Libra digital currency, has formed a committee to follow up on the ongoing project developments.

The Technical Steering Committee (TSC) will oversee the technical design of the Libra platform as well as coordination of other developments.

Switzerland’s President Ueli Maurer earlier said Facebook’s cryptocurrency Libra has failed in its current form. He advised amending the project before being submitted for regulatory approval.

Moreover, Ayman Al-Banna, senior advisor at MAG Consulting, said the cryptocurrency should be transferred into a “Manage Stable Coin”. He noted that this would help Facebook achieve its plan of introducing a global cryptocurrency.

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