Regulating the Wild West of Digital Currency
On December 3, at the Financial Crimes Enforcement Conference, Sigal Mandelker, the Under Secretary for Terrorism and Financial Intelligence, laid down the law, urging the crypto community to smarten up. 'Digital currencies have their perks, but if they keep being the playground of crooks, we’re in trouble!' she said.
The Dark Side of Crypto: Risks and Responsibilities
Mandelker warned that financial institutions and crypto service providers need to step up their game to prevent bad actors from hijacking their systems.
'The digital currency industry must harden its networks and undertake the necessary steps to prevent illicit actors from exploiting its services,'
she emphasized. It sounds simple enough until you realize that cybersecurity isn’t quite as easy as hitting ‘update’ on your smartphone.
International Cooperation: A Must?
She highlighted that international regulators need to bolster their anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks to tackle this carousel of confusion and criminality in digital spaces.
- More scrutiny on exchanges and wallets
- Understanding the global implications of localized regulations
In simpler terms, coordinate or get caught in the web of chaos!
The Iranians and Their Ransom Schemes
Mandelker painted a rather alarming picture of recent activities involving cybercriminals using malware like ‘SamSam,’ impacting over 200 entities, including state organizations. Apparently, two Iranian financial facilitators got a little too comfortable exchanging Bitcoin ransoms – surprise, surprise, they’ve found themselves on the U.S. Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals list.
'For the first time ever, OFAC attributed digital currency addresses associated with designated individuals,'
she pointed out. Now that’s what you call putting a dent in their plans!
Estonia and New York Take the Leap
While the U.S. is tightening its digital currency belt, Estonia isn’t lagging behind either. The Estonian Ministry of Finance announced they’re beefing up regulations for virtual currency providers.
- Bye-bye alternative payment services
- Hello, stricter oversight for exchange service providers
Meanwhile, the NYC Department of Financial Services goes tech-savvy with a blockchain solution allowing real-time fund transfer. 'It’s like upgrading from a bicycle to a jetpack,' one insider joked. No more playing telephone with funds!
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