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US Treasury Secretary Steven Mnuchin Comes Out Against Crypto

The United States Treasury Secretary, Steven Mnuchin, has come out hard against crypto. This comes after the United States President Donald Trump recently shared some anti-crypto tweets on Twitter.

Mnuchin: Crypto can be used for illicit activities

Specifically, Mnuchin’s crypto-averse comments came at a press conference on July 15th. Furthermore, Mnuchin said that cryptocurrencies can potentially be used for illicit activities, and highlights the importance of enforcing FinCEN regulations for crypto firms. 

What’s more, Mnuchin even went so far as to call the use of cryptocurrencies a “national security issue”. Although Mnuchin made no mention of the fact that US dollars are commonly used for illicit ends as well, he said that “billions of dollars” worth of crypto have been used for dubious purposes:

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“Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity, like cybercrime, tax evasion, extortion, randomware, illicit drugs, human trafficking … This is indeed a national security issue.”

Furthermore, Mnuchin went on to comment on cryptos’ supposed role as crime financing currencies. Although this is a generalization which has been proved wrong time and time again, Mnuchin said that “speculation” and “illicit activities” have been integral to propping up the price of cryptos.

“I think to a large extent, these cryptocurrencies have been dominated by illicit activities and speculation.”

Mnuchin: As the President has said…

If it wasn’t already abundantly clear that Mnuchin’s views are influenced by those held by Trump, Mnuchin even commented on this. For example, Mnuchin referenced Trump’s recent tweets, saying: “as the President has said, ‘Bitcoin is highly volatile and based on thin air’”.

Moreover, Mnuchin also noted that the US Treasury “takes [the role of the US dollar as the world’s reserve currency] very seriously”. Due to this, it is clear as to why it would not be in Mnuchin’s interest to endorse any crypto.

Global mainstream adoption of crypto would likely come at the expense of US dollar usage. Naturally, this is not something that the US Treasury Secretary wants to happen. Additionally, Mnuchin also commented that the Treasury has stressed that digital financial services are bound by general rules.

For example, AML, KYC and anti-terror financing policies are all applicable. 

As a part of this, Mnuchin said that all crypto transmitters will require Bank Secrecy Act compliance. They will also need to register with the Financial Crimes Enforcement Network (FinCEN). FinCEN is a federal regulator which has authority over all money transmitters. Moreover, Mnuchin argues FinCEN should also handle crypto firms moving forward.

However, it should be noted that Trump has previously claimed cryptocurrencies “are not money”. This, however, does not seem to have stopped Mnuchin from requiring FinCEN registration by crypto providers.