Steven Mnuchin: Bitcoin is national security issue
Steven Mnuchin, US Treasury Secretary, supports Donald Trump's attitude to Bitcoin, the Facebook Coin Libra and other cryptocurrencies. In a press conference, the former Goldman Sachs employee told the US government's attitude to cryptocurrencies.
When it comes to the regulation of Bitcoin and other cryptocurrencies, the crypto community sometimes often looks across the pond. What does the US say about cryptocurrencies? What are the regulatory approaches of the Securities and Exchange Commission? What's up with the Facebook Coin Libra? Steven Mnuchin spoke on behalf of the Trump government on 15 July.
Steven Mnuchin: Libra could be used for money laundering
The nearly 30-minute statement by the US Treasury Department begins with a statement on the planned by the Zuckerberg Group cryptocurrency. Accordingly, Steven Mnuchin comments on Libra as well as Bitcoin and other cryptocurrencies:
The US Treasury has expressed very serious concerns that [Facebooks] Libra can be used by money launderers and for terrorist financing. Cryptocurrencies like Bitcoin have been exploited for billions of dollars for illegal activities such as cybercrime, tax evasion, extortion, ransomware, illegal drugs, human trafficking.
Since Bitcoin & Co. served all these illegal activities, they are, according to Mnuchin, "a matter of national security."
The US government is unwilling to let users of cryptocurrencies trade underground. Thus, Bitcoin exchanges and crypto companies would have to follow the same rules as other financial institutions. These include above all the anti-money laundering laws (Anti Money Laundering = AML) as well as the know-your-customer-rules (Know Your Customer = KYC).
Bitcoin is hot air: Ministry of Finance in line with Donald Trump
In addition, all companies involved in cryptocurrency must register with the Financial Crimes Enforcement Network (FinCEN), a department of the Treasury Department against economic crimes. Finally, Mnuchin continued, the Ministry of Finance shares Donald Trump's view:
As the President said, Bitcoin is highly volatile and based on hot air. We are concerned about the speculative nature of Bitcoin and will ensure that the US financial system is protected from fraud.
In particular, the international nature of cryptocurrencies requires that the authorities cooperate on a supranational level:
The Ministry of Finance takes the role of the US dollar as the world's key currency very seriously and we will continue our efforts to protect our country and to safeguard US and international finance.
The Ministry of Finance has already spoken with the regulatory authorities about the planned Facebook Coin. The discussions proceeded accordingly. If Facebook works with "proper AML", they could do their project. But there is still a lot of work needed.
US Treasury warns of Bitcoin investment
Asked by a reporter what Bitcoin is paying attention to, Steven Mnuchin warned of "evil actors":
You should be careful. One should be clear in what one invests. There are a lot of good things to invest in. Our main concern, however, is that no evil actors use cryptocurrencies. To a large extent, these cryptocurrencies were used for illegal acts and speculation.
But anyone who fancies doing Bitcoin Illegales will be caught:
When dealing with a legitimate entity in the US, these legitimate crypto-related entities are also subject to KYC rules and AML. If you use Bitcoin and go through these entities to go to the Dark Web and think you will not get caught: you'll get caught. That's a warning. If you want to use it for speculation, that's one thing. But if you use it for illegal things, we will put the full effort of the Ministry of Finance and regulators in place.
Finally, the Venezuelan cryptocurrency Petro comes up in the subsequent question and answer session. This serves to circumvent the US sanctions against the South American country. However, Steven Mnuchin sees no danger in this:
I do not know anybody who actually uses [the Petro]. Or someone who had some success or something.
Did the US restrictions work? "Absolute".