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New US regulation threatens crypto

Photo of: Joseph Stone
by Joseph Stone

Regulation of cryptocurrencies is now becoming a priority in the United States. The administration appoints Brian Nelson to the Treasury to define new rules.

Regulation. This prospect, as is often the case, worries companies. The cryptocurrency players can now prepare for it… and activate their lobbying efforts to influence future decisions.

The Biden administration, however, is on the move. And so it intends to put in place new rules for the crypto sector. To see for yourself, just look at the latest appointment made official by the White House.

The U.S. president appoints Brian Nelson to the powerful Treasury Department. The latter will fill the position of undersecretary for the division of terrorism and financial crimes. Nelson will be in charge of the implementation of the 2020 Anti-Money Laundering Act.

But this will not be his only prerogative, as the new undersecretary explained before the United States Senate. Brian Nelson makes it known that the implementation of new regulations for crypto will be among his priorities.

What does crypto have to do with terrorism or money laundering? It’s true that cryptocurrencies can serve such purposes… like fiat currency though. However, Nelson’s scope is not limited to these areas. He is also involved in financial regulation.

The Anti-Money Laundering Act of 2020, for example, gives regulators the ability to prevent “cryptocurrencies from undermining existing laws,” the undersecretary emphasized at his Senate hearing.

“I think this legislation has provided new authorities – or clarified the law – that cryptocurrencies or currency in any form, whether virtual or fiat, are covered by the Bank Secrecy Act,” he points out in particular.

Why this reference? Because FinCEN (Financial Crimes Enforcement Network), which depends on the Treasury, has already used the bank secrecy law to intervene in cases involving crypto.

And for Nelson, this legislation, dating back to 1970, is a “powerful tool for FinCEN to ensure that whatever form the currency takes, it has the tools to regulate it. “

The new undersecretary, however, promises balance in the implementation of the law. This will include preventing “virtual currency and other types of new technologies” from undermining the fight against money laundering. But, the regulation also wants to preserve “responsible innovation” so that it remains in the United States. A real balancing act ahead?