To that end, Cohen also mentioned that an unnamed member of the digital currency community would be added to the Treasury’s Bank Secrecy Act Advisory Group (BSAAG). The BSAAG is an anti-money laundering group chaired by the Financial Crimes Enforcement Network (FinCEN) director, and exists as a mechanism for suspected money laundering operations to be reported to FinCEN by the banking industry.
Cohen also noted that while may be bitcoin a novel way to launder money, there’s nothing inherent about the protocol that would make it preferable for criminal or terrorist networks. In fact, he argues, most such operations would probably have little use for something like bitcoin.
Terrorists generally need ‘real’ currency, not virtual currency, to pay their expenses -– such as salaries, bribes, weapons, travel, and safe houses. … The same is true for those seeking to evade sanctions.”
Cohen did stress that transparency and regulation were needed to “help bring stability to the virtual currency market and security to its users and investors,” but noted that the Treasury only sees a need for sensible, flexible and “scalable” regulation.