In a statement released on October 19, 2023, FinCEN Director Andrea Gacki emphasized the crucial role of CVC mixing services in facilitating unlawful activities. Gacki stated, “CVC mixing offers a critical service that allows players in the ransomware ecosystem, rogue state actors, and other criminals to fund their unlawful activities and obfuscate the flow of ill-gotten gains.”
This marks FinCEN’s inaugural use of the Section 311 authority, targeting a class of transactions of primary money laundering concern. Gacki affirmed the Treasury’s commitment to identifying and eradicating the illicit use and abuse of the CVC ecosystem, echoing efforts in the traditional financial system.
The announcement referred to the 2022 National Money Laundering Risk Assessment (NMLRA), which highlighted a surge in criminals employing anonymity-enhancing technologies, including CVC mixing, to conceal fund movements. Following the NMLRA, OFAC designated Blender.io and Tornado Cash in 2022, both linked to significant money laundering cases involving North Korea-controlled entities.
Specifically addressing the CVC ecosystem, Treasury took action against Bitzlato Limited in January 2023, identifying it as a primary money laundering concern in connection with Russian illicit finance. This coordinated effort involved collaboration with U.S. law enforcement and international partners.
These measures underscore the government’s commitment to countering illicit finance in the evolving landscape of cryptocurrency, with a focus on disrupting activities associated with CVC mixing and other related risks.
SOURCE: FINCEN GOC | NOVEMBER 15 2023
