What is Financial Crimes Enforcement Network (FinCEN)?

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The Financial Crimes Enforcement Network or ‘FinCEN’ is a bureau of the US Department Of Treasury. As an organization, its stated goal is to gather and analyze data on financial transactions.

The purpose of this data gathering is to aid in the enforcement of US financial regulation while forwarding national security through US financial strategy. By gathering and analyzing data, FinCEN doles out relevant information to various legal agencies. From US Intelligence Agencies, Law Enforcement, anti-money laundering, or AML enforcement agencies.

FinCEN is therefore the United States Financial Integlance Unit or FIU, working alongside other international financial regulatory bodies to create the Egmont Group. An international coordinated effort in combating money laundering and other financial crimes.

Banking Secrecy

FinCEN has its origins in the Bank Secrecy Act or the Currency and Foreign Transactions Reporting Act of the 1970s. The stated goal of this act was to aid in the prevention and combating of money laundering by creating legal standards of record-keeping and other financial reporting regulations. One of the most commonly known is the CTR or ‘Currency Transaction Report’ which requires the reporting of financial transactions over 10 thousand dollars. CTR would develop along with the development of FinCEN into the regulatory standard of a SAR or Suspicious Activity Report. FinCEN has broadened its focus from standard banks to MSBs or Money Services Businesses.

The goal of FinCEN while involved in the prevention and detection of money laundering has steered its focus to include cryptocurrencies. Stating that the use of cryptocurrencies in illicit activities is a ‘national priority and of key strategic value’ in combating terrorism and the global use of ‘dirty money.’ Attempts of cryptocurrency and MSB regulation have become a matter of great concern for FinCEN,  highlighted by the hiring of a Chief Digital Currency Advisor Michele Korver in July of 2021. Korver was promoted from the US Department of Justice ‘Money Laundering and Asset Recovery Divison.’ Representing the heightened interest of the United States in the cryptocurrency ecosystem.

FinCEN Leak

On September 20th, 2020 Buzzfeed and the ICIJ (International Consortium of Investigative Journalists) published the findings of data leak from FinCEN. This leak included over 200,000 financial transactions that were deemed suspicious. Financial institutions are required to file SARs on suspected criminal transactions in conjunction with other legal mandates.

The report found that over 170 international financial institutions could be implicated in handling dirty money. According to these leaked documents the value of these transactions was over 2 Trillion dollars from 1999-2017. Thus representing a shocking insight into the potentially lax control that the US government maintains on financial crime. As published in the paper, US authorities knew of the illegal transactions and still chose or were unable to prosecute the many institutions implicated in this criminal activity.