The Federal Bureau of Investigations (FBI) has warned American citizens about cryptocurrency money-transmitting services that aren’t registered as Money Services Businesses and don’t adhere to anti-money laundering requirements.
The Bureau strongly encourages users to “avoid cryptocurrency money transmitting services that do not collect ‘know your customer’ (KYC) information.”
KYC is a process in which banks or other organizations require an identity check to ensure that their customers are who they say they are. Documents such as ID cards, passports, and driving licenses might be used to verify someone's identity.
“The FBI has recently conducted law enforcement operations against cryptocurrency services which were not licensed in accordance with federal law,” the announcement reads.
Those who use unlicensed cryptocurrency money-transmitting services “may encounter financial disruption during law enforcement actions,” particularly if this currency is “intermingled with funds obtained through illegal means.”
Law enforcement will investigate organizations that “purposefully break the law or knowingly facilitate illegal transactions,” the announcement states.
The FBI warns that individuals using unregistered cryptocurrency money-transmitting services may risk losing access to their funds once law enforcement has investigated these businesses.
Crypto news platform Cointelegraph spoke to lawyers about the topic, who claim that the public service announcement is targeted at crypto mixing services, warning people to stay away from those organizations.
One example of the latest cryptocurrency mixing service that has been seized is Samourai Wallet. The founders and CEO of the cryptocurrency-mixing wallet have been arrested and charged with multiple offenses related to the illicit service, which can facilitate illegal transactions.
Keonne Rodriguez and William Lonergan Hill have been charged with operating Samourai Wallet, an unlicensed money-transmitting business that facilitated over $2 billion in unlawful transactions. The pair also “laundered over $100 million in criminal proceeds.”
The pair laundered money from illegal dark web markets, such as Silk Road and Hydra market, alongside many other illegal schemes. These include “web server intrusion, spearphishing schemes, and schemes to defraud multiple decentralized finance protocols.”
“Rodriguez and Hill allegedly knowingly facilitated the laundering of over $100 million of criminal proceeds from the Silk Road, Hydra Market, and a host of other computer hacking and fraud campaigns,” US Attorney Damian Williams said
The website has been seized by law enforcement in a takedown of illegal cryptocurrency mixing services.
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