Bitcoin Pulpit: Trump Admin Continues to Highlight Crypto Crime

Top Trump administration members — including President Trump himself — have recently been taking increasingly open stances against cryptocurrencies.

A related thread has unfurled this week as the White House coordinated with various agencies to publish two advisories that, in part, highlighted how cryptocurrencies are sometimes used to facilitate narco-trafficking.

Of course, crypto proponents argue that skeptics of the technology over-magnify its use in illicit activities. So if leaders in the Trump administration like Treasury Secretary Steve Mnuchin — who will “not be loaded up on bitcoin” in 10 years — want to generally discourage good and bad actors alike from using the tech, it’s in their interest to highlight these activities where they can.

Keep Your Eyes Peeled

The new advisories didn’t center on cryptocurrencies, but rather on the various methods that Chinese and Mexican drug suppliers use to get Fentanyl and other synthetic opioids into the hands of U.S. buyers. To that end, one of the bulletins was for financial institutions and the other for “digital private sector platforms” like e-commerce sites.

Specifically then, these documents come as the White House wants to help companies “in detecting and reporting related activity” regarding to illicit purchases of drugs like Fentanyl, which can be up to 100 times more powerful than morphine. The backdrop is the ongoing opioid addiction crisis in the U.S.

“The epidemic is tearing away at the social and economic fabric of our communities, while
[transnational crime organizations], international drug traffickers, money launderers, and other criminal actors profit off the misery of victims,” one of the advisories read.

Among other payment rails, the White House said virtual currencies like bitcoin, bitcoin cash, ether, and Monero are sometimes used by U.S. citizens to buy these drugs from foreign suppliers via “clearnet” or “dark web” sites.

“On these websites, fentanyl and other synthetic opioids can be purchased with Bitcoin or more
traditionally-accepted payment methods,” the coordinating agencies said.

That virtual currencies have been used in such transactions has been no secret across many fields since before the takedown of the Silk Road marketplace back in 2013. The growing and continued critical spotlight suggests the Trump administration doesn’t plan on sitting on its hands where possible when it comes to cryptocurrencies.

Blacklisting Addresses

Money of any kind can be used for bad or good deeds, and the current administration is certainly being proactive when it comes to addressing bad deeds done with virtual currency — something we haven’t seen before out of a U.S. presidency.

The latest domino to drop in that regard came on August 21st, when the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) blacklisted the cryptocurrency addresses of three Chinese citizens that the watchdog says were involved in drug trafficking and money laundering.

Kenneth Blanco, Director of the Treasury’s Financial Crimes Enforcement Network (FinCEN), said the crackdown comes as a campaign is just beginning to bring a spotlight to new kinds of crime flows:

“We are making the financial sector aware of tactics and typologies behind illicit schemes to launder the proceeds of these fatal drug sales, including transactions using digital currency and foreign bank accounts. Financial institutions must be on alert to red flags and other indicators of the complex schemes fentanyl traffickers are employing so that financial institutions can report and share relevant information with law enforcement, and ultimately help save lives.”

To be sure, cryptocurrencies are interesting and notable for much more beyond crime. The fact that the Trump admin has been zooming in on that aspect while not simultaneously fostering innovation around the tech is telling.

Why? Because the administration could be tough on crime while also fostering crypto innovation. But we’ve only seen the toughness to date.

   

eToro Risk Warning: 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.