The Government Accountability Office (GAO) is a government agency that provides audit and investigative services to the United States Congress. She has just released a report in which she links the use of cryptocurrency payments to the increase in several crimes in the United States. The agency identifies the adoption of cryptocurrency ATMs (crypto ATMs), which are not sufficiently regulated, as a trigger for this phenomenon. It therefore invites regulators to strengthen the registration requirements for these machines.
Human and drug trafficking
The GAO specifies in its report that cryptocurrencies are now used as a means of payment in the context of human trafficking. The agency also notes that there is high use of these assets especially in online sex trafficking, where the majority of major sex markets accept this form of payment. She attributes the growing adoption of cryptocurrencies to difficulties faced by traffickers when making credit and debit card payments.
The GAO report also indicates that the global market for illegal drugs on the dark web has become more stable and harder to detect due to cryptocurrencies. The agency found that 36% of ICE (Immigration and Customs Enforcement) investigations involving cryptocurrencies were related to drug trafficking. This figure rises to 85% in the context of cryptocurrency seizures made by the United States Postal Service (USPS) for the same crime.
According to the GAO report, cryptocurrency is becoming a more common way to move money across borders without attracting the attention of law enforcement. The agency linked the growing popularity of this form of money laundering to less regulated cryptocurrency ATMs, which allow criminals to remain anonymous.
“Cash couriers deposit large volumes of cash from illicit products, drugs into an ATM to convert the value into cryptocurrencies. Once the funds are in this form, the funds can easily be transferred to another cryptocurrency user’s wallet, reducing the risk associated with carrying bulk currency“says the report.
Regulating Crypto ATMs
Although the operators of these machines are required to register with FinCen (Financial Crimes Enforcement Network), the GAO says they do not are not required to inform the latter of their location. “This limits the ability of federal agencies to identify ATMs in areas that have been designated as high risk for financial crimes“, says the report.
The agency therefore urges regulators to strengthen the regulation of cryptocurrency ATMs, in order toobtain information that will identify potentially illicit transactions. To this end, it has made recommendations to FinCen and the IRS (Internal Revenue Service) on the new requirements that operators of these machines will have to comply with.
Proof of the growing adoption of cryptocurrencies, the proliferation of ATMs is unfortunately proving to be conducive to money laundering and various criminal activities. It is therefore urgent to regulate the use of these machines without harming access to cryptocurrencies.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 on a few cryptos only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.