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  • The FBI stated in an April 25 public service announcement that people should only use the services of registered licensed Cryptocurrency Money Services Businesses.
  • The Bureau pointed out recent law enforcement operations targeting cryptocurrency networks that operate without proper authorization. 

The US Federal Bureau of Investigation (FBI) has issued an alert to the American public about not using unregistered cryptocurrency money transfer services. This advisory comes amid the growing legal battles in the United States between regulators and cryptocurrency firms.

 

The FBI stated in an April 25 public service announcement that people should only use the services of registered licensed Cryptocurrency Money Services Businesses that follow all the rules of Know Your Customer (KYC) and Anti-Money Laundering (AML). The Bureau pointed out recent law enforcement operations targeting cryptocurrency networks that operate without proper authorization, warning that people may face significant devastation of their finances through mixing their funds with those illegally obtained if they use such unlicensed services.

The FBI explains possible financial damages as it is related to the arrest, which may have an impact on intermingled money between criminal activities and fees paid through cryptocurrency services. The alert emphasizes the bureau’s persistent efforts to combat illicit cryptocurrency activity by ensuring compliance with the regulations on financial transactions that the federal government has in place.

MetaMask, the platform that allows users to interact with decentralized applications (dApps) on the Ethereum platform, has been the subject of criticism due to the lack of compliance with the rules that govern broker-dealers. The SEC’s enforcement action against MetaMask illustrates their regulative duty regarding the uncontrolled growth of the crypto market and to make everyone accountable for the securities laws.

Focus on Privacy Tools Raises Concerns

Michael Bacina, a Digital Asset Partner at Piper Alderman law firm, points out that one of the objectives of the FBI advisory is to alert users to avoid privacy tools that are smart contract-driven, like Samourai or TornadoCash. On the other hand, Bacina argued that the warning is insufficient to accurately describe how decentralized systems work and proposed the development of clear regulatory frameworks instead of an enforcement-oriented approach.

Recently, the police arrested the owners of the Bitcoin wallet and crypto mixing service named Samourai Wallet, namely Keonne Rodriguez and William Hill.  The two have been accused of money laundering and running an unlicensed money-transmitting business, receiving a possible sentence of up to 25 years in prison. 

Several commentators have raised questions about the vagueness of the present definition of an MSB within the cryptocurrency ecosystem. Ryan Sean Adams, co-founder of Bankless, pointed out the uncertainty around whether code or wallets should be labeled as MSBs, which, in turn, received attention after some developers involved in privacy were identified under law enforcement actions.

 

In October 2023, the Treasury’s Financial Crimes Enforcement Network proposed including crypto mixers into its list of primary money laundering concerns following incidents such as the Hamas attack on Israel. Moreover, the US Department of Justice (DOJ) made international news by arresting the founders and CEO of Samourai Wallet, a common privacy-focused Bitcoin wallet and mixer.


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