What is the Financial Crimes Enforcement Network?
THE ROLE AND MISSION OF FINCEN
The Financial Crimes Enforcement Network, aka FinCEN, is an agency within the United States Department of Treasury which was created back in 1990. It officially became a bureau of the Department of Treasury upon the passing of the Patriot Act in 2002. The role of FinCEN is to collect and analyze information related to financial transactions. This financial information is then used by FinCEN in an effort to uncover criminal acts of money laundering, terrorist financing, and other financial white-collar crime. FinCEN is famous for its well-known slogan: “follow the money.” FinCEN is responsible for following the money in foreign bank and financial accounts due to the Bank Secrecy Act which requires any United States person to report any foreign accounts that have a value of over $10,000 to the Department of Treasury. The main goals of FinCEN are to identify any “emerging threats to the global financial system” and then support the law enforcement agencies involved in investigating and prosecuting cases. FinCEN’s 300 or so employees’ issue around 6,500 intelligence reports yearly. FinCEN has six divisions that are meant to help combat money laundering and terrorism financing, they are:
- Intelligence Division: This division is focused on transactional issues, analytics and research,
- Enforcement Division: This division is focused on enforcing rule compliance, special investigations, and special measures,
- Policy Division: This division is focused on developing and implementing regulatory and strategic policy,
- Liaison Division: This division is focused on general operations and support,
- Technology Division: This division is focused on data security and infrastructure, and
- Management Division: This division is focused on the overall management of FinCEN as an organization.
Since its inception in 1990, FinCEN has grown in both power and stature and now monitors countless transactions worldwide. The next challenge for FinCEN to tackle is that of the regulation and monitoring of virtual currencies.
CURRENT FOCUS OF FINCEN
Virtual currencies like bitcoin have been largely unregulated since their inception. The ability for cryptocurrencies to move between parties without much oversight has led to its use in many forms of criminal activity. While many invest in cryptocurrency to make profits, cryptocurrency is also used on the dark web to buy anything from illegal drugs to dangerous weapons. Bills such as the proposed “Cryptocurrency Act of 2020” will empower FinCEN to better investigate and help prosecute suspected crimes involving the use of various forms of cryptocurrency. FinCEN has made it clear that cryptocurrencies will not be allowed to be used without regulation in 2020 and the foreseeable future. FinCEN will also continue to enforce what is known as the “Travel Rule.” The Travel Rule falls under the Bank Secrecy Act and it requires banks to pass on certain specific transmittal information to other banks when there are international transfers made in excess of $3,000.
HOW DOES THIS AFFECT ME?
If you have any foreign bank accounts or any cryptocurrency holdings, then you may be at risk to be in the crosshairs of FinCEN. The director of FinCEN recently stated that certain crypto companies have been required since 2011 to follow the Travel Rule and any current and future violations of the travel rule will be met with strict enforcement and harsh penalties. The crypto industry can expect much tougher rules and regulations going forward as laws seeking to regulate cryptocurrency are increasingly enforced. FinCEN is a powerful agency with the ability to monitor countless transactions worldwide for compliance with federal law. If you have any questions about what your legal responsibilities are if you maintain foreign bank accounts or invest in cryptocurrency, then it is important to seek the advice of an experienced federal criminal defense attorney as soon as possible.
