Cryptocurrency Experts Address FinCEN CVC Mixing NPRM and Whistleblowers in CLE
On October 19, 2023, FinCEN issued a groundbreaking Notice of Proposed Rulemaking (“NPRM”) that “identifies international Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern.” The NPRM marks the first time that FinCEN has used its authority under Section 311 of the USA PATRIOT Act to target a class of transactions as a money laundering concern. If implemented, the regulation will impose heightened recordkeeping and reporting requirements on domestic financial institutions that engage in transactions involving CVC mixing.
On October 24, three cryptocurrency experts – Claiborne (“Clay”) Porter, Jane Khodarkovsky, and Kevin Mosely – delved into the proposed regulation and addressed how the government investigates whistleblower claims involving cryptocurrency fraud during a Continuing Legal Education (“CLE”) program sponsored by the New York State Bar Association (“NYSBA”). Getnick Law attorney Courtney Finerty-Stelzner organized and participated in the CLE in her capacity as Chair of the NYSBA Commercial and Federal Litigation Section, Civil Prosecution Committee.
Clay Porter and Jane Khodarkovsky are both partners at Arktouros LLC and former attorneys at the Department of Justice(“DOJ”) Money Laundering and Asset Recovery Section (“MLARS”). Kevin Mosely is the Deputy Chief of the DOJ MLARS Bank Integrity Unit and a Deputy Director of the DOJ National Cryptocurrency Enforcement Team (“NCET”).
During the CLE, Clay, Jane, and Kevin discussed how CVC mixing transactions have been used by terrorist organizations to illicitly fund their operations; what financial institutions engaging in CVC mixing transactions will need to do to meet the proposed regulatory requirements; and the NPRM’s implications for organizations in the cryptocurrency space.
The CLE also addressed how whistleblowers can contribute to cryptocurrency enforcement efforts. Courtney noted that multiple government agencies have whistleblower programs that enforce cryptocurrency fraud, including the IRS, SEC, and CFTC and asked Kevin to explain how NCET liaises with other government agencies when investigating whistleblower claims involving cryptocurrency. Kevin agreed that the DOJ takes a whole government approach to enforcing cryptocurrency fraud and added that the government works to protect whistleblowers who come forward with claims.
A recording of the CLE is available on NYSBA’s website. To learn more about Getnick Law’s whistleblower practice, go here.