Policy of the United States on Money Laundry - Dictionary of Arguments

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Money laundering: Money laundering is the illegal process of concealing the origin of money obtained from illicit activities (like drug trafficking, terrorism, or fraud) to make it appear legitimate. It typically involves three stages placement (introducing dirty money into the financial system), layering (creating complex transactions to obscure the trail), and integration (returning the money to the criminals as seemingly legitimate funds). _____________ Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

> Policy of the United States	> Money Laundry	Policy of the United States on Money Laundry - Dictionary of Arguments CRS II 29 Money Laundry/Crypto/Policy of the US/CRS/Tierno/Labonte/Scott: All financial institutions are subject to BSA/AML laws ((s) Band Secrecy Act/Anti-money laundry) and their implementing regulations, which include “Know Your Customer” and customer identification programs, reporting, and record keeping requirements.⁽¹⁾ BSA/AML requirements of banks, money services businesses (as many crypto firms are licensed), and other financial institutions are roughly similar.⁽²⁾ There is a perception, however, that compliance among crypto firms is considerably weaker than more traditional firms.⁽³⁾ In addition, it is practically difficult to apply BSA/AML laws, as currently configured, to transactions conveyed across public blockchains - referred to as “on-chain activity” - as it is pseudonymous and permissionless.132 Users are not identified by their real names and do not register with government issued identification, and the only binding constraint on interaction with the network is access to an internet connection and certain software. For these reasons, while certain entities operating in this manner are subject to BSA/AML requirements, a 2023 Treasury report characterizes compliance and enforcement as incomplete.133 In addition, touchpoints between public blockchains and the formal financial system (the so called on- and off- ramps between hosted and unhosted wallets) are not regulated. Such perceptions and practical considerations may create impediments to bank BSA/AML compliance or introduce risks should banks choose to partner with or acquire crypto firms or otherwise engage with pseudonymous blockchain based cryptocurrencies. In light of such potential impediments, regulators or legislators may face the need to assess what level of operational risk inherent in these various functions should be welcomed into the banking system. >Fake transactions, >Wash trade, >Crypto wash trading. 1. The Bank Secrecy Act (12 U.S.C. 1951 et seq. and 31 U.S.C. 5311 et seq.) is the framework of laws that aims to reduce money-laundering and the financing of terrorism by requiring financial institutions to adopt a series of riskbased programs. 2. In a 2019 guidance document, FinCEN addressed how BSA/AML rules are applicable to crypto firms. FinCEN, FIN-2019-G001, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, May 9, 2019, at https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf. 3. See for example OCC, OCC Issues Consent Order Against Anchorage Digital Bank, April 21, 2022, https://www.occ.gov/news-issuances/news-releases/2022/nr-occ-2022-41.html. U.S. Department of Justice, “Binance and CEO Plead Guilty to Federal Charges in $4B Resolution,” Press Release, November 21, 2023, at https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution. _____________ Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.	Policy of the United States CRS I Congressional Research Service (CRS) Marc Labonte Fixed Exchange Rates and Floating Exchange Rates: What Have We Learned? Washington: Congressional Research Service of the Library of Congress 2007 CRS II Congressional Research Service (CRS) Paul Tierno Marc Labonte, Banking and Cryptocurrency: Policy Issues. CRS Congressional research Service Report R48430. Washington, DC. 2025 CRS III Congressional Research Service (CRS) Corrie E. Clark Heather L. Greenley, Bitcoin, Blockchain, and the Energy Sector. Washington, DC. 2019 CRS IV Congressional Reserch Service (CRS) Paul Tierno Cryptocurrency: Selected Policy Issues Congressional Reserch Service CRS Report R47425 Washington, DC. 2023

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