New Task Force by Trump to Battle Crypto crimes and Fraud
A new executive order by Trump has included Crypto crimes as a category of financial frauds, liable for prosecution by a new Task Force. The order also directs the Department of Justice to set up a task force for regulating market integrity, consumer fraud, and cryptocurrency crimes. This new task force will replace the 2009-constituted Financial Fraud Enforcement Task Force.
Market Integrity and Consumer Fraud
The purpose of the new task force is to provide guidance for investigating cases as well as prosecuting fraud by the government, consumer or all categories of financial fraud. It will also constitute recommendations which will encourage cooperation and strengthen the ties between government agencies. It will also investigate as well as prosecute fraud in terms of financial crimes.
The task force will be convened by the Deputy Attorney General as per necessity and can call for representatives from any of the government departments. The other members of the task force are – Associate Attorney General, the Assistant Attorney Generals for the department of Antitrust, tax, civil and criminal divisions, Director of FBI, and other US attorneys and officers, employees of the Justice Department, as directed by the Attorney General.
One of the primary reasons for the setting up of a formal Task Force for market integrity and consumer fraud is the new thrust globally to battle cross-country economic and financial crimes, including Crypto crimes. There are international task forces such as the Global Tax Enforcement consisting of the US and the United Kingdom, Australian Criminal Intelligence commission, Canadian Revenue Agencies and the Netherlands financial investigating commission.
The new task force will work in tandem with the national regulatory body on securities trading, the Securities and Exchange Commission (SEC).
The SEC has been lately grappling with the burgeoning of crimes at cryptocurrency exchanges through aggressive policymaking. In fact, it has already issued advisories on the ICO or the crypto-tokens it regards as “potentially” illegal.
Bank Secrecy laws applicable
Bank Secrecy Laws would also be applicable to cryptocurrency exchanges, since they are now regarded as a money service business and shall be open to regulatory probes, according to the Financial Crimes Enforcement Network. All exchanges should take immediate steps to go through an MSB registration with the FinCEN.
Hence, there is a need for establishing a strong and empowered task force to regulate the increase in the number of cryptocurrency crimes, in recent months. The present laws and regulations are limited in their scope in terms of the newer currency crimes.
The types of fraud are very complex and cannot be managed, evaluated with legacy laws. The new FinCEN definition of cryptocurrency exchanges as organizations which are involved in multiple money services and businesses and should be regulated. The regulation of these services shall be managed by the Bank Secrecy Laws or the BSA. Thus the importance of FinCEN needing MSB registration cannot be ignored. In fact, it is highly desirable, and it provides an advanced method to overcome cryptocurrencies crimes in the financial services sphere.