US government to strictly enforce KYC rules for cryptocurrency exchanges

As the New York Times recently reported, at a conference hosted by a blockchain analysis company, the Director of the US Financial Crimes Enforcement Network (FinCEN) announced that the US government would be strictly enforcing the “travel rule” anti-money laundering measure over cryptocurrency exchanges. The travel rule “requires cryptocurrency exchanges to verify their customers' identities, identify the original parties and beneficiaries of transfers $3,000 or higher, and transmit that information to counterparties if they exist.” It is a standard feature of anti-money laundering law and the subject of recent recommendations by the Financial Action Task Force (FATF), which held that the rule should apply to cryptocurrency exchanges due to the large amount of theft, scams and fraud associated with them (estimated to be $4.3 billion this year). The report indicates this was something of a surprise to cryptocurrency firms, who felt that cryptocurrency was not money and that the travel rule therefore didn’t apply to them.