Federal officials announced a new round of legal actions related to the use of cryptocurrencies for illicit purposes.
Terrorism Sanctions: The Treasury Department’s Office of Foreign Assets Control sanctioned several entities for financing terrorist activities. Among those sanctioned was a Lebanon-based Syrian money exchanger that provided Hizballah with digital wallets to receive funds from the Islamic Revolutionary Guard Corps-Qods Force and to conduct cryptocurrency transfers on behalf of sanctioned entities and officials.
Kucoin Charges: Separately, the Justice Department and the Commodity Futures Trading Commission charged Kucoin, one of the largest crypto exchanges, for operating an unlicensed money transmitter business, failing to maintain an adequate anti-money-laundering program, and violating CFTC regulations. The DOJ said Kucoin—which in December paid a $22 million settlement for failing to register as a securities and commodities broker-dealer in New York—has received $5 billion, and sent $4 billion, in suspicious and criminal proceeds.
Crypto Risks: The latest actions follow a new round of sanctions related to Russian crypto activity and ongoing reports of North Korea’s theft of crypto to fund its weapons programs. In a recent comment letter, ICBA urged the Financial Crimes Enforcement Network to strengthen a proposed rule that would introduce recordkeeping and reporting requirements for financial institutions directly involved in crypto transactions.