Kenneth Blanco, director of the Financial Crimes Enforcement Network (FinCEN), has said that banks must think about their cryptocurrency risk exposure.
Speaking at a virtual conference on Tuesday, Blanco said FinCEN, a bureau of the U.S. Treasury Department, and banks' examiners would assess the effectiveness of their anti-money laundering (AML) programs.
So banks need to be asking themselves, "What baseline controls do we have in place to identify customers? Do we have institutional or peer-to-peer virtual currency customers? How does our financial institution interact with emerging payment systems? Do we have the tools we need to identify and report potentially suspicious activity occurring through our financial institution?" said Blanco. "All of these questions go back to the policies and procedures in place to mitigate risk."
The director went on to say that if banks are not thinking about these issues, it will be clear when examiners visit them.
Last year, FinCEN, along with the Securities and Exchange Commission and the Commodity Futures Trading Commission, issued a joint statement, requiring firms dealing in digital assets to abide by AML obligations. These include recordkeeping and submitting suspicious activity reports.