Concerns about Facebook’s cryptocurrency project and the Libra Association are growing within American lawmakers, political organizations and government institutions. Several sides have expressed their preoccupation with the sustainability of Libra and, mostly, its ability to comply with the current regulations in the United States.
The latest institution to publicly express its doubts about the project is the United States Treasury. Through its Secretary Steven Mnuchin, the organization has mostly backed the sentiments about crypto and, most specifically, Libra, expressed in recent days by the President of the nation Donald Trump.
Enforcing FinCEN Regulations when Necessary
Through a press conference at the start of the new week, Mnuchin said that he, like Trump, doubts the effectiveness of crypto asset and thinks they have too much potential to be used to fund illegal endeavors. He also stated that FinCEN regulations needed to be enforced whenever necessary when it comes to dealing with crypto organizations.
The Secretary of the Treasury even observed that the use of digital assets like Libra to finance illicit activity should be, and is, a matter of national security, stressing that considerable amounts of money – billions of dollars – have been used for legally dubious projects.
“Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity, like cybercrime, tax evasion, extortion, randomware, illicit drugs, human trafficking … This is indeed a national security issue,” he stated in the press conference.
“Cryptocurrencies Have Been Dominated by Speculations”
Whilst taking enquiries from the press, Mnuchin took the opportunity to comment on the role of digital assets and cryptocurrencies as tools and means to fund criminal activity. “I think to a large extent, these cryptocurrencies have been dominated by illicit activities and speculation.”
Trump recently criticized Bitcoin and the cryptocurrencies in general, saying that there was only one currency that the Americans should trust: the US dollar. Mnuchin supported those comments and stated: “As the President has said: ‘Bitcoin is highly volatile and based on thin air’” and “Treasury takes very seriously the role of the U.S. dollar as the world’s reserve currency.”
Attacking Digital Assets
Trump used the Social Media Summit on July 12th to take a hit on crypto assets and defend the US dollar. Via his official Twitter account, the president said that they are highly volatile and that they can “facilitate unlawful behavior.” He also criticized the crypto project that is on everybody’s lips: Libra.
Mnuchin says that the United States Treasury has made a priority of letting people know (mostly Facebook users and Bitcoin investors) that digital financial services, such as Libra, need to comply with the same Anti-Money Laundering and Combating the Financing of Terrorism policies as other, more traditional institutions like banks.
And if that were not enough, Mnuchin notes that Libra and all crypto projects also need to comply with the Bank Secrecy Act (BSA) and register with the Financial Crimes Enforcement Network (FinCEN): a bureau of the Treasury.
By Andres Chavez