CVC mixing concerning CTF
FinCEN introduced a Notice of Proposed Rulemaking (NPRM) designating international Convertible Virtual Currency Mixing (CVC mixing) as a primary concern for money laundering and terrorism financing (FinCEN).
According to FinCEN, this NPRM addresses the global threat of illicit actors using CVC mixing services, proposing a rule to enhance transparency, increase Counter-Terrorism Financing (CTF), and combat malicious actors, such as Hamas, Palestinian Islamic Jihad, and the DPRK (FinCEN).
What is an NPRM?
A Notice of Proposed Rulemaking (NPRM) is a formal announcement or document published by a government agency. The purpose is to inform the public and interested parties about a proposed new regulation or changes to existing rules.
The NPRM typically includes the proposed regulatory text, a detailed explanation of the rule’s rationale, and a period for public comments. After the comment period ends, the agency reviews the feedback. Then, the agency may change the proposed rule before issuing a final rule. This process helps ensure that regulations are well-informed, reasonable, and aligned with public interests and needs.
What is CVC Mixing?
Convertible Virtual Currency Mixing (CVC mixing), or cryptocurrency mixing or tumbling, enhances the privacy and anonymity of cryptocurrency transactions. It consists of mixing or blending cryptocurrency funds from different sources in a way that makes it difficult to trace the origin of the funds or link them to specific individuals or addresses.
The primary motivation behind CVC mixing is to prevent the tracking of cryptocurrency transactions. While blockchain technology offers transparency and traceability, which can be advantageous for security and compliance, it can also pose privacy concerns. Mixing services can help protect the privacy of cryptocurrency users by breaking the link between their identities and their transactions.
Counter-Terrorism Financing (CTF)
Counter-Terrorism Financing (CTF) refers to the efforts and measures taken to prevent and disrupt the financing of terrorist activities. These activities involve the flow of funds, financial resources, and economic support to terrorist organizations or individuals. CTF aims to identify, track, and stop the financial transactions that enable terrorism. It is a critical component of national and international efforts to combat terrorism. It is often intertwined with Anti-Money Laundering (AML) measures.
How Truth Technologies can help:
Financial institutions and other organizations can use compliance software to enhance their ability to prevent, detect, and report on activities related to terrorism financing. Compliance software can help companies comply with regulations and plays a significant role in national and global security efforts to combat terrorism.
Truth Technologies ‘provides software that helps organizations adhere to requirements by automating and streamlining various compliance processes. Contact us today for a free demo and see how we can help identify at-risk countries and which organizations or individuals may be associated with those countries.