Seeking to regulate the firms in vast cryptocurrency sector under the Bank Secrecy Act (BSA), a US-based advisory firm, Financial Integrity Network (FIN) has now approached the United Congress.
FIN has suggested the Congress to generate a new class of financial institution under the BSA.
FIN released testimony before today’s hearing. The testimony advises that system-wide governance must be formed to control virtual asset service providers also known as VASPs, according to a report.
In the current scenario, a few VASPs are controlled as money transmitters under the BSA. Meanwhile, the other VASPs escape these regulations, claims David Murray, FIN’s vice president for product development and services.
However, some experts have cast doubts that the regulation could make it tough for a few crypto firms to carry on with their operations. Murray said that it is not the job of BSA to adjust everyone. As per the FIN testimony, legislation gets cleared that bans unidentified companies. The Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act is a crucial legislative step under deliberation that would ban unidentified companies.
Cryptocurrency regulations could be boosted by producing a new class of financial institution: virtual asset transaction validators added the FIN testimony.
Non-existence of system-wide financial crimes compliance (FCC) governance for some current cryptocurrencies permits criminals space to operate and makes it hard for the US to abandon rogue service providers from the country’s financial system.
Meanwhile, the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ subcommittee on National Security and International Trade and Finance, is all set to organize a hearing today, in which David Murray is expected to testify including others.
Earlier, Murray had confessed that imposing the suggested regulations on individuals and unidentified companies would make it hard for a few existing implementations of blockchain-based payments to carry on their operations as they do currently.
US regulators have expressed their fears on cryptocurrency.
According to an earlier report, US President Donald Trump and Treasury Secretary Steven Mnuchin have spoken their fears on the use of cryptocurrency to finance illegal activity and emphasized the role of imposing Financial Crimes Enforcement Network regulations about crypto-dealing companies.
Switzerland and Japan have already created legal frameworks that have involved cryptocurrency investments and projects. US-based crypto enthusiasts feel regulatory clarity is important to the sector’s growth.