On August 12, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the country’s main financial watchdog, held its 12th Annual Las Vegas Anti-money Laundering Conference. The theme of this year’s conference was “cooperation in an environment which is rapidly advancing on many technological fronts”.
This year, Kenneth Blanco, the Director of FinCEN, focused on two main issues to discuss. The first was the rapid rise of mobile gaming and gambling especially in the wake of the May 2018 Supreme Court ruling that lifted the federal ban on sports betting. The second issue was the increasing popularity of convertible virtual currency (CVC). Blanco’s speech highlighted the interconnectedness of the financial system – he believes that diligence and transparency are the keys to combating money laundering as well as other financial crimes in the both the United States and the rest of the world.
To achieve some of these goals, the organization seeks to use data submitted by the casinos to the system under the Banking Secrecy Act in the form of suspicious activity reports (SARS). To make it even better, FinCEN is set to apply modern tools such as advanced AI to address the issue.
“Sports betting and other mobile gaming services run through your casino are no different than other products and services. FinCEN expects that your casino or card club is monitoring your sports betting programs for potentially suspicious activity. This includes offering sports betting through a mobile app,” Kenneth A. Blanco said during the conference.
In essence, FinCEN warned gambling operators to apply the same Anti-Money Laundering (AML) rigor to both sports betting and mobile gambling that they have been using on other gambling verticals.
Ramping Up CVC-Related Regulation
According to FinCEN, the casino operators have not been very keen it comes to the reporting of CVC-related suspicious activity report (SAR). To that effect, the organization already issued an advisory on illicit activity involving the digital currencies back in May. One of the things that FinCEN is concerned with is how exactly the gambling operators have been conducting blockchain analytics in order to determine the source of the customers’ CVC.
Also, the financial watchdog will require all CVC-friendly online gambling sites offering services to US customers to register formally with them and observe the federal bank Secrecy Act (BSA) – this is regardless of whether the sites are licensed within the United States or internationally. All of them are therefore considered to be money transmitters. While this might receive some backlash form the crypto market, it goes without saying that it might just be a positive development for the sector since they will be effectively regarded as legitimated forms of transactions.
