We’re Not Out to Villainize Bitcoin

The Financial Crimes Enforcement Network (FinCEN) has been to date one of the most active – and more controversial – US federal agencies to address the bitcoin ecosystem, doing so through a number of published rulings aiming to provide clarity to the industry.
Founded in 1990, the US agency is responsible for collecting information about financial transactions that may be used to support money laundering, terrorist financing and financial crimes. FinCEN first addressed emerging virtual currencies in 2008 and has been simultaneously praised for engaging with the bitcoin ecosystem, while facing criticism from those who say its efforts have sometimes stifled innovation.
In a new interview with CoinDesk, FinCEN Director Jennifer Shasky Calvery has moved to counter this narrative, reiterating that while her agency’s foremost goal is to protect domestic businesses and citizens, FinCEN remains committed to minimizing the burden of bitcoin and digital currency startups that are making good-faith efforts to comply with regulation.
Calvery told CoinDesk:

“We don’t start at a product and villainize a product, we villainize the bad actors and find out what they’re doing with their money.”

Further, Calvery said that FinCEN is more broadly seeking to gain the support of the domestic bitcoin ecosystem, suggesting that the industry should seek to demonstrate how the technology could possibly be an aid to law enforcement agencies and organisations such as FinCEN:

“I would try to put the challenge out to the industry itself. [...] We ask that you think about it from an anti-money laundering (AML) perspective, what could you build in [to the technology]? [...] I would challenge your readers to think about it from our perspective and see if they can’t come up with some ideas.”

The comments come as part of wide-ranging interview with CoinDesk in which Calvery discussed developments in the field of digital currency, New York’s BitLicense proposal and what FinCEN expects from bitcoin businesses seeking to serve to the US public.

Bitcoin steps up to crime concerns

Throughout the interview, Calvery sought to make clear her belief that bitcoin as a technology is not more susceptible to criminal misuse than other financial services.
Rather, Calvery said that bitcoin’s status as a newcomer to the financial ecosystem has made it the target of bad actors.
She suggested that FinCEN believes the bitcoin community is taking steps to combat the technology’s use in dark markets and illicit commerce, but that some businesses are actively making it difficult for her agency. Overall, however, her tone was arguably softer than in interviews earlier this year, when Silk Road and its related law enforcement cases dominated headlines.
Calvery said:

“You see industry responding and trying to put controls on this. So you see industry springing up around some of these things, but at the same time, you also see businesses springing up trying to make it more difficult for law enforcement.”

Calvery indicated that FinCEN is currently researching ring signatures, a cryptographic signature in which an action is attributed only to a group, and tumblers, a type of mixing service meant to hide where transactions originate.

Informal bitcoin dealers on radar

Consistent with its mandate as chief AML regulator for the US, Calvery asserted that all members of the bitcoin ecosystem that fall under FinCEN’s guidance should follow its directives.
Of particular concern, Calvery said, are informal bitcoin dealers who may think they can operate outside of the agency’s oversight.

Read more:
http://www.coindesk.com/fincen-director-villainize-bitcoin/