BlocksInform
Danny Nelson
Danny is the Associate Editor at CoinDesk. It has BTC, ETH and SOL.
A high-ranking U.S. financial crimes enforcement officer on Thursday directed the crypto industry to proactively blacklist “problematic” wallets even before Treasury Dept. officials order them to do so.
Alessio Evangelista, the associate director of enforcement at the financial crimes enforcement network (fincen), said that “too often” crypto service providers have opted to keep their heads in the sand about blatantly suspect wallets “right up until the day of an OFAC designation or criminal indictment.”
Speaking to an audience of compliance fans at the chainalysis links conference, Evangelista warned that virtual asset service providers are “putting their own reputation at risk” by ignoring “clearly observable red flags that they could and arguably should have taken note of long ago.”
The comments highlight the growing concerns of federal officials about cybercrime, a multi-billion dollar backlog that in some instances now threatens national security. This month, Treasury officers for the first time sanctioned a crypto mixer – an on-chain privacy tool that crypto holders use to hide their tracks – over processing assets stolen by North Korean hackers in the $620 million Axie Infinity heist.
"These funds were stolen to support a totalitarian regime that spends its money on developing weapons of mass destruction at the expense of feeding its citizens," the evangelist said. It stated that providers of virtual asset services are obligated to monitor themselves effectively. Those who do not "are putting their own reputation at risk.”
He also named crypto projects for which "decentralization" was more fashionable than reality. Cryptographic entities operating under the guidance of individuals cannot circumvent their compliance obligations by falsely characterizing themselves as decentralised, he said.
North Korean hackers have used several crypto blenders to launder stolen funds at Axie, including the blender, the first blender to be sanctioned, and tornado money. A Tornado Cash representative previously told CoinDesk that “OFAC is the judge of what addresses need to be banned."
