FinCEN ’s Suspicious Statistics

Diego ZuluagaIt ’s difficult to outdo the crypto community when it comes to makingbold quantitative claims that, stripped out of context, mislead the incautious. But Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco recently came close.Inremarks last week to the annual (and, alas, virtual) Consensus conference for crypto professionals and enthusiasts, Blanco declared that, “since 2013, FinCEN has received nearly 70,000 Suspicious Activity Reports (SARs) involving virtual currency exploitation.” That impressive figure was bound to get attention—andit did. The speech is also likely to reinforce the widespread view that cryptocurrency is a hotbed of financial crime. But Blanco omitted to say that, in 2019 alone, financial institutions filed more than 2.3 million SARs regarding all sorts of transactions, and that, according to FinCEN ’s own statistics, virtual currency SARs make up just 0.56 percent of all such reports filed since 2014.[1]Whom to believe —Blanco, or his agency’s numbers? Were FinCEN an obscure or unimportant agency, the answer might not matter very much. But as the U.S. Treasury Department’s illicit finance watchdog, FinCEN is a crucial enforcer of financial regulations —ones which, according to a 2018survey, community bankers consider the costliest to comply with. Yet, despite FinCEN ’s significance, the SAR database (FinCEN’s main resource for law enforcement) is bloated and opaque, and the usefulness of ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs