- The FBI has initiated regulatory actions against unregistered crypto service providers.
- The agency has issued a warning to United States citizens.
- U.S. authorities have intensified crypto crackdowns in recent months.
Over the past years, regulatory bodies in the United States have amped up efforts aimed at curbing the use of the crypto asset class for financial crimes, such as money laundering, terror financing, and other illicit activities. However, focus is particularly rising now as geopolitical tensions and cyber crimes heighten across the globe, further underscoring the urgency for enhanced regulatory measures.
Amidst the intensifying regulatory actions, a warning has been issued to American crypto investors.
FBI Amps Crypto Enforcement Actions
On Thursday, April 25, the Federal Bureau of Investigation released an “Alert on Cryptocurrency Money Services Businesses,” warning U.S.-based market participants against the use of unregistered service providers.
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The FBI asserted that crypto money transmitting services that purposely break the law and facilitate illegal transactions will face legal actions from law enforcement agencies and users of such services risk bearing consequences.
Highlighting the risks associated with engaging firms that neglect anti-money laundering requirements, the agency underscored that individuals associated with such entities may experience significant financial disruptions. This could entail loss of access to funds if a firm faces enforcement actions, as assets linked to individuals are frequently seized during law enforcement operations.
To help you avoid getting caught in the crossfire, we have highlighted steps that can prevent unintentional use of non-compliant services.
How to Stay Safe
While it may be challenging to distinguish between regulated and unregulated service providers, the following steps, according to the FBI, may aid you in recognizing suspicious services.
- Exercise Caution with Unregistered Services: Avoid using cryptocurrency money transmitting services that are not officially registered as Money Services Businesses (MSBs) with the appropriate authorities, as they may not adhere to anti-money laundering requirements and could be operating illegally.
- Beware of KYC Requirements: Be cautious of crypto services that do not request Know Your Customer (KYC) information, such as name, date of birth, address, and ID, before allowing you to send or receive money or cryptocurrency. Legitimate services often require KYC information to comply with regulations.
- Use Legal and Compliant Services: According to the FBI, just because a cryptocurrency service is available on an app store does not necessarily mean it is legal or compliant with federal requirements. Users must research to ensure that the service is registered and reputable.
- Avoid Services for Illegal Purposes: Refrain from using services that advertise themselves for illegal purposes or knowingly facilitate illegal transactions. Using such services may put you at risk of financial disruptions and legal consequences.
- Stay Informed about Criminal Activity: Be cautious with cryptocurrency services that have been linked with criminals for money laundering. Stay informed about common scams and criminal tactics to protect yourself from becoming a victim.
- Report Fraudulent Activities: If you encounter fraudulent or suspicious activities related to cryptocurrency services, you can report them to the FBI Internet Crime Complaint Center. Reporting such activities helps law enforcement agencies investigate and take action against illegal operations.
Read more about the recent crackdown on crypto mixer Samourai Wallet for alleged money laundering:
Why Samourai Wallet Is in Hot Water with DOJ
Here’s how payment giant is tapping stablecoins to re-enter the crypto market, read more:
Stripe Makes Crypto Comeback: Here’s How It’ll Work
