U.S. Treasury Secretary Steven Mnuchin agrees with his boss that crypto is for crooks.
In a press conference Monday, Mnuchin voiced the Trump
administration’s concerns with Facebook’s Libra and cryptocurrencies
like bitcoin. Mnuchin’s statements come ahead of two hearings
on Capitol Hill this week, in which Facebook blockchain lead David
Marcus is expected to testify before both Senate and House lawmakers.
The press conference also follows a series of tweets
from President Donald J. Trump last week regarding cryptocurrencies and
Libra. At the time, Trump said cryptocurrencies are used in “unlawful”
activities such as drug trafficking. In a subsequent tweet, Trump said
Facebook might have to acquire a banking charter to conduct business
with Libra.
While Mnuchin did not make any new policy statements Monday, he did
reiterate statements made by various government entities in the past,
describing the potential for cryptocurrencies to be used by criminals as
one main issue.
“Libra could be misused by money launderers and terrorist
financiers,” Mnuchin said, using money laundering, terrorist financing,
extortion, human trafficking, drug trafficking and tax evasion as
examples of crimes that could be facilitated by cryptocurrencies and
Libra. He added:
“This is indeed a national security issue.”
The Financial Crime Enforcement Network (FinCEN) will be examining
Libra and bitcoin, and will hold any entity that transacts with either
“to the highest standards,” Mnuchin said.
Mnuchin also referenced the Financial Action Task Force (FATF), which published guidance
for central banks on how to regulate cryptocurrency service providers
last month. In particular, the FATF guidance recommends enforcing the
so-called “travel rule,” which requires exchanges and wallet providers
to hold know-your-customer information on the recipients of
transactions.
“We’re going to great lengths to ensure that effective regulation does not stop at our borders,” Mnuchin said.
Look at Libra
Mnuchin referred to Libra, which Facebook first announced last month,
a number of times in the half-hour press conference. Representatives
from the social media giant have met with Treasury officials, as well as
other government agencies, he said.
So long as Facebook can maintain strict anti-money-laundering
standards, there should be no problem with it launching Libra, but
Mnuchin said multiple times that the company has much work to do before
he will be convinced of its compliance.
Mnuchin said he is “not comfortable” with Libra launching at this time.
“With regard to Facebook’s Libra, our overriding goal is to maintain
the integrity of our financial system and protect it from abuse,”
Mnuchin said.
In response to a question on bitcoin and other cryptocurrencies more
broadly, Mnuchin said he did not know and would not speculate on how or
why bitcoin’s price might be trading at its current levels.
“We’ll make sure the general public and investors understand what
they’re investing in and whether it’s the SEC or other regulators there
[will be] proper disclosures.”
Bitcoin’s price climbed more than 4 percent in the 45 minutes since the conference began
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