According to the United States Secretary of the Treasury, Steve Mnuchin, the Financial Crimes Enforcement Network (FinCEN) is about to unveil new crypto regulations.
Although the exact details regarding these regulations have not been announced yet, Mnuchin gave some ominous hints. First off, Mnuchin said that FinCEN is increasing its measures to inhibit terrorist funding, particularly when it comes to cryptocurrency.
Indeed, one of the most common allegations against cryptocurrency is that it is used by terrorists, despite the fact that only 0.08% of crypto transactions involve illegal activity.
Simultaneously, the budget for monitoring digital currency transactions is being significantly increased, i.e. the government is about to spend a lot more money on blockchain forensics. This compromises the inherent anonymity of most cryptocurrencies, in the name of making sure that no one uses crypto for crime, despite the fact that only a tiny fraction of crypto transactions are used for crime.
Further, Mnuchin said that he does not want crypto to be used as the modern equivalent of “old Swiss secret number bank accounts”, and that crypto was being used for cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.
Essentially, Mnuchin has made it clear that he thinks cryptocurrency is the currency of criminals, despite the data showing only 0.08% of crypto transactions involve illegal activity. This suggests that the new regulations that are about to come out will be quite harsh.
Zooming out, it is not surprising that the Treasury Department would take negative actions against cryptocurrency since Bitcoin (BTC) is perhaps the US Dollar’s main competitor.