As the U.S. Securities and Exchange Commission (SEC) Chair keeps chasing non-compliance in crypto, his agency was slammed by the watchdog Government Accountability Office (GAO) for its own compliance failure in issuing crypto accounting standards without treating the policy as a formal rule. So, what now? In practical terms, probably nothing much.
U.S. SEC Messed Up in Handling Contentious Crypto Accounting Bulletin: GAO
The U.S. Securities and Exchange Commission (SEC) was out of bounds when it issued its controversial “Staff Accounting Bulletin 121,” according to the Government Accountability Office (GAO). The 2022 guidance, which the industry says threatens crypto investors’ ability to find safe harbors for their assets, should have been treated as a formal rule, the GAO concluded in a report issued on Tuesday.
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Reports Show Government Intends To Imply Stricter Regulations On Cryptocurrency ATMs
In a press release yesterday, the federal agency stated that crypto kiosks, or cryptocurrency ATMs, played a major role in the increasing crimes. The United States GAO (Government Accountability Office) blames crypto kiosks for increasing drug trafficking and human trafficking.
Their reason, however, was that cryptocurrency ATMs aren’t as restricted as crypto exchanges, making their transactions harder to track. The GAO projects that it can be more difficult to curtail illegal transactions as crypto kiosks are becoming more and more popular in the U.S. and worldwide.
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To salvage these impending problems arising from crypto kiosks, the GAO recommended that the Financial Crimes Enforcement Network (FinCEN) and IRS cooperate to place more effective regulations on crypto ATMs.
Total Market Cap declines by 3% on daily chart | Source: TradingView.com
While observing the challenges in battling crypto-related crimes, GAO explained that the lack of information about crypto kiosks restrains law enforcement’s capability to defeat crime.
Several Agencies Battle Crypto Crimes
In the report, GAO also observes how, globally, cryptocurrencies are used in facilitating crimes and trafficking. Also, agencies have arisen to resist the increase of crypto-associated crimes. These agencies include the Immigration and Customs Enforcement (ICE), U.S Postal Service (USPS), and even the Internal Revenue Service (IRS).
The Irregularities of Crypto Crimes
Although the study shows that crypto-related crimes have upsurged irregularly. Recently, a new report from the crypto research company showed the contrary. In the latter research’s findings, crypto crimes reached their lowest point in 2021-contrary to its increasing volume of the entire blockchain transactions in the year.
Thus, as cryptocurrencies become more adopted, crypto-related crimes will simultaneously increase. However, the expansion of overall crypto transactions is far-outperforming some criminal activity.
Crypto Kiosks And Human Trafficking
The GAO’s report showed that cryptocurrency has recently been adopted as a means of payment for human trafficking. By ‘human trafficking,’ we imply sex trafficking and labor trafficking. More commonly, sex traffickers now adopt cryptocurrencies as a payment option.
Crypto ATMs And Drug Trafficking
The report also stated that after the shutdown of Silk Road-the online dark web market—in 2013, the entire hidden web marketplace has become more secure. Thus, making the marketplace for illicit drugs more difficult for the law to detect. Again, this is because of the growth of smaller marketplaces.
Tightening Gaps Against Cryptocurrency ATMs
The GAO’s problem with cryptocurrency ATMs is that, although the ATM operators must be registered with the FinCEN, they don’t usually notify law enforcement agencies about their ATMs’ locations. That action impedes the federal agencies’ access to locate ATMs in areas stated as high-risk regions for financial crimes.
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Thus, by increasing regulations on cryptocurrency ATMs, the GAO presumes that enforcing the government will access better information. Also, they will be able to locate potentially illegal transactions.
Featured image from Pixabay, chart from TradingView.com
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