Bitcoin on the publicly traded balance sheet

While the trend of publicly traded corporations like Tesla and MicroStrategy holding bitcoin on the balance sheet has garnered some criticism, particularly as crypto moves from a bull to bear market, Peirce said that this is an issue between executives and shareholders, not a company and its regulator. 

“I don’t want to be in the business of running companies,” she said, touching again on her theme of not being a ‘merit regulator’, and declining to comment if this was the right thing or not for listed firms to do. 

Who’s got the money?

Aside from the issues surrounding digital assets and securities regulators, the other pinnacle issue for crypto and regulation has been money laundering. At the end of the pipe is usually fiat currency, and with those cold hard dollars comes regulated institutions that they deal with. 

Last year, the founders of BitMEX, one of the largest digital assets derivatives exchanges, were charged with violating the Bank Secrecy Act. The alleged crime? Not collecting identification documents from its customers, so that an anonymized transaction on the blockchain sent to or from BitMEX’s wallets could be tied to a name.

Prosecutors allege that BitMEX was a conduit for laundered proceeds of ransomware hacks, or a place for those connected to the Iranian regime to clean their crypto and move it to other exchanges to convert to dollars. 

Needless to say, this is an issue that the industry takes seriously as it’s impossible to register on account on any exchange without providing multiple pieces of identification and proof of address. But for regulators, there’s still not enough being done. 

“Our biggest concern is with foreign exchanges that allow cashing out of illicitly obtained crypto,” FinCEN’s Mossier said, citing examples of major ransomware attacks with crypto-denominated proceeds as a reason to up the regulatory threshold.

Recently, officials in the EU, published a draft of a proposed regulation produced in conjunction with the Financial Action Task Force (FATF) that would require virtual asset service providers — crypto exchanges — to provide real name data about senders and recipients for any transaction larger than $1000. In South Korea, a similar move is taking place under the guise of tax reporting. 

Aside from what’s already known, Mossier didn’t give any hints of what’s coming down the American regulatory pipeline on this topic. Just that he would like regulators “to do more” before there’s a “major event.”

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  • Blockworks
    Reporter
    Sam Reynolds is a Taipei-based reporter, covering digital assets and regulation throughout Asia. Before joining Blockworks he was an editor at Forkast News and an analyst with IDC.