Crypto-related suspicious activity reports are often linked with crime, scams, and other similar things. However, it is the first step in a process that starts with identifying potentially dangerous issues at an early stage.

From May to the present day, crypto firms have submitted an abnormally high number of Suspicious Activity Reports, or SAR, with 7,100. The information was provided by Kenneth Blanco, who is the director of the Financial Crimes Enforcement Network (FinCEN) at a conference this week.

The news is a follow-up of the organization’s guidance in May, explaining how the Banking Secrecy Act is applied to the current digital asset landscape. The mentioned act is one of the strongest foundations of the anti-money laundering regulation in the United States.

7.4 Million Queries per Year

“Each day, FinCEN, law enforcement, regulators, and others query this data—that equates to an average of 7.4 million queries per year. Those queries identify an average of 18.2 million filings that are responsive or useful to ongoing investigations, examinations, victim identification, analysis and network development, sanctions development, and U.S. national security activities, among many, many other uses that help protect our nation, deter crime, and save lives,” Blanco said.

Of the previously mentioned total, 2100 filers made a direct reference to the guidance, and dozens of new institutions and entities filed their initial report. The number is certainly high, but it is an indication of enhanced surveillance on potentially illicit activity by crypto ATMs, exchanges and trading platforms.

“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us,” Blanco said about the enhanced surveillance activity around the industry.

Venezuela and Crypto Suspicious Activity

One of the nations in which suspicious activity in the crypto industry has hit new heights (or lows, depending on how you view it) is Venezuela. The statement was confirmed by Blanco in the event. The South American nation, the one with the oil-based coin “Petro,” has seen the number of unregistered money services proliferate in recent times.

These crypto firms usually report lots of darknet-linked clients transactions, a higher number of scams, and more attempts to target older generations, who are especially vulnerable as a group given their limited knowledge of technology resources and crypto spaces.

According to Blanco, all the crypto-related services and institutions should consider enhancing or improving their crypto SAR reporting, making it tighter and more effective. “If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency,” the director explained.

Enhancing Awareness

Blanco’s thoughts come in the middle of an awareness-enhancing process, as more crypto exchanges, analysts companies, and related crypto services shore up their efforts to expand suspicious activity reporting.

According to a Forbes story that ran just a few days ago, there is a confidential “Indicators of Suspicion for Virtual Asset Service Providers” report, which is a playbook for detecting suspicious activity, created by the stakeholders.

By Andres Chavez


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