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FBI warns against unregistered crypto services amid rising legal tensions

By:
on Apr 26, 2024
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  • The FBI's recent public service announcement could be targeting smart-contract-driven privacy tools.
  • The FBI highlighted the dangers of using cryptocurrency services not licensed in accordance with federal law.
  • Consensys claims that SEC’s campaign to exert authority over Ethereum would bring the blockchain to a halt.

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The Federal Bureau of Investigation has issued a warning to Americans about the risks associated with using unregistered cryptocurrency money-transmitting services, indicating a potential crackdown on privacy-focused crypto tools.

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Focus on smart-contract-driven privacy tools

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The FBI’s recent public service announcement could be targeting smart-contract-driven privacy tools.

The announcement, made on April 25, emphasized the importance of using only registered Cryptocurrency Money Services Businesses (MSBs) that comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.

Risks of using unlicensed services

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The FBI highlighted the dangers of using cryptocurrency services not licensed in accordance with federal law.

It noted that individuals using such services could face financial disruptions, especially if their funds are intermingled with money obtained through illegal means. This warning followed law enforcement actions against unlicensed cryptocurrency services.

Arrests at Samourai Wallet

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In a related development on the same day, the co-founders of the Bitcoin wallet and crypto mixing service Samourai Wallet were arrested. CEO Keonne Rodriguez and CTO William Hill were charged with money laundering and operating an unlicensed money-transmitting business. They currently face up to 25 years in prison if convicted.

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These events are part of a broader escalation of legal tensions between crypto firms and regulators in the United States. On the regulatory front, Ethereum development firm Consensys has taken a bold step by suing the SEC.

Consensys sues SEC over Ethereum regulation

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Meanwhile, Consensys filed a lawsuit against the SEC in federal court in Texas, arguing that the regulator’s actions aimed at controlling the future of cryptocurrency, particularly Ether and the Ethereum blockchain, threaten to cripple one of the internet’s most significant innovations.

The company claims that the SEC’s campaign to exert authority over Ethereum would bring the blockchain to a halt.

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