The US government’s anti-money laundering overseer has published a new analysis on suspicious activity it has seen since May 2013 and for the first time ever, Bitcoin gets a mention in the report.
According to the Financial Crimes Enforcement Network (FinCEN) SAR Analysis for July 2014, the financial intelligence unit (FIU) is “observing a rise in the number of SARs flagging virtual currencies as a component of suspicious activity.”
The report offers readers guidance on when a Bitcoin related SAR might be filed with FinCEN which is worth noting, if only to highlight the FIU’s perspective. Financial Crime Asia’s commentary is in italics.
Information on users of crypto-currency (even when their participation in the transaction is not considered suspicious) is very useful for the analysis of the narrative. – Report information on users.
Speculation in a volatile asset is not a criminal activity. However, speculation can share a transaction footprint with other activities that might be suspicious, (such as activity associated with High Yield Investment Programs (HYIP), or outright criminal, such as Ponzi Schemes involving Bitcoin.) – Fraudsters use Bitcoin. Report all speculation just in case.
A cash deposits followed by a transaction to an automated clearing house or to a known virtual currency exchanger could identify entities acting as virtual currency dealers that may be acting as unregistered MSBs. – It may also denote those who are acting as registered MSB and are acting within the law
MSBs may be uniquely placed to see the funds originating from a compromised bank account destined for a virtual currency exchanger, other MSB, to other compromised accounts (at MSBs or other FIs) or for the purchase of virtual currency.
Correspondent banks able to see aggregate fund transfers to and from foreign-based virtual currency exchangers
Virtual Currency Exchangers may know when users send Bitcoin to other users who are customers of that same exchange or may be able to compare Bitcoin addresses associated with illicit activity against the activity of addresses they have issued to their customers.