Key Takeaways:
The US Federal Bureau of Investigation (FBI) on Thursday, April 24th, published a public service announcement warning Americans against using unregistered platforms providing cryptocurrency-related services.
FBI Cautions Americans to Avoid Crypto Platforms that Violate AML Regulations
According to a statement put out by the FBI’s Internet Crime Complaint Center (IC3), US residents have been asked to avoid crypto services offered by firms that are not registered as Money Services Businesses (MSB) under the federal law and “do not adhere to anti-money laundering requirements”.
The bureau mentioned a few simple steps to prevent the “unintentional use of non-compliant services” like avoiding cryptocurrency money transmitting businesses that do not collect know your customer (KYC) information from customers “when required”.
The agency also suggested users check whether a crypto money-transmitting service is registered as an MSB with the US Treasury Department’s Financial Crime Enforcement Network (FinCEN).
Users can verify whether a crypto firm is legal by verifying its registration on the FinCEN website.
Crypto Users Asked to Be Cautious of Token Mixing Platforms
The FBI stressed that even if a crypto app can be found on an app store it does not necessarily mean it is a legal service and is compliant with federal requirements. They further warned users to avoid using services that advertise themselves for illegal purposes and to be cautious when using cryptocurrency services known to be used by criminals to launder their funds, such as token mixing platforms.
The release further stated that cryptocurrency money-transmitting services that purposely break the law or knowingly facilitate illegal transactions will be investigated by law enforcement. Notably, it also warned that using a service that does not comply with legal obligations may put the user at risk of losing access to funds after enforcement operations target those businesses.
The FBI’s warning came a day after the US Department of Justice (DoJ) charged the founders of Samourai Wallet, a cryptocurrency-mixing service, with multiple offenses related to facilitating illegal services, such as unlawful transactions.
Keonne Rodriguez and Willian Lonergan Hill, the CEO and CTO of Samourai Wallet, have been charged with operating an unlicensed money-transmitting business that facilitated over $2 billion in unlawful transactions. The pair is also accused of laundering millions of dollars in criminal proceeds from illegal dark web marketplaces such as Silk Road and Hydra Market.
They were also involved in other illegal schemes, such as web server intrusion, spearphishing schemes, and schemes to defraud multiple decentralized finance (DeFi) protocols.
DoJ Shut Down Token Mixing Site Samourai Wallet, Charges Founders For Facilitating Illegal Transactions
On Wednesday, US Attorney Damian Willians said that Rodrigues and Hill had facilitated the laundering of over $100 million worth of criminal proceeds from Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns.
Federal prosecutors emphasized that since the platform launched its top two features, ‘Ricochet’ and ‘Whirpool’, in 2017 and 2019, respectively, over 80,000 BTC – worth over $2 billion at the time of writing – has been processed in various transactions. Samourai earned an estimated $4.5 million in revenue over the same period.
The DoJ has since seized the Samourai Wallet website.
The FBI has asked users to report any fraudulent or suspicious activity by cryptocurrency services to the bureau’s Internet Crime Complaint Center. Meanwhile, legal experts claim that the public service announcement is largely aimed at token mixing services.
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