Dear Madam or Sir:
FinCEN is highlighting
this trend because of: (1) its strong association with corruption and transnational criminal
organizations, two of FinCEN’s national anti-money laundering and countering the financing
of terrorism (AML/CFT) priorities; (2) a need to enhance reporting and analysis of related illicit
financial flows...
- Today this memo seeks further guidance on FinCEN's interpretation of Illegal Mining (Page 7 of Notice, FIN-2021-NTC4).
- Does FinCEN interpret instances of illegal virtual currency mining similar to Notice, FIN-2021-NTC4's definition of illegal mining?
- Transnational criminal organizations (TCOs) could be leveraging illegal virtual currency mining of Bitcoin, STX and NYCCoin currently:
As we compile relevant research on the matter, we understand FinCen's interpretation of illegal mining as follows, (excluding virtual currencies):
"Illegal mining involves extraction of various metals, stones, and materials,
including gold, silver, iron, coal, diamonds, emeralds, and rare earths, in
violation of the law, including by failing to secure legal permits, land rights,
licenses, and environmental safeguards. The activity is often associated
with other crimes or criminal groups such as TCOs, corruption, fraud,
human trafficking, and money laundering. Proceeds from illegal mining are
estimated by international organizations to be between $12 and $48 billion per
year and the activity results in significant deforestation, loss of biodiversity,
environmental damages, and threats to human health. The extraction occurs around the world, by small and large-scale mining,
and increasingly involves TCO activity. In addition, this trade is often
commingled with legal trade and may involve corporate structures and
shell companies in various jurisdictions. Illegal mining is unique in that
it provides illicit actors both a source of proceeds as well as a means to
launder proceeds from other crimes. Most of the proceeds of this activity
are thought to end up in the international financial system. The Federal
Bureau of Investigation has found that TCOs are using “often-witting United
States businesses to exploit U.S. regulations and export illegally extracted
gold to the United States to launder billions of illicit proceeds from criminal
operations in Latin America."
Greatly looking forward to your team's distinguished feedback on the interpretation of illegal mining and if mining of virtual currencies is included in FinCen's interpretation.
Sending you the very best regards.
Thank you,
Gunnar
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Gunnar Larson - xNY.io | Bank.orgMBA - Entrepreneurship and Innovation (ip)
G@xNY.io
+1-646-454-9107
New York, New York 10001