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The Government Accountability Office has recommended that the IRS and the Financial Crimes Enforcement Network be given more information about the locations of the kiosks where people can turn cash into coins. The GAO believes that the government should have more insight into one of the ways that people obtain the digital currency outside of the regulated exchanges because of its potential use in sex trafficking and drug dealing.
Kiosk operators already have to comply with several regulations, but GAO argues that it is still hard for government agencies to get a complete picture. The government has to deal with people who are running illegal kiosk operations, but they aren't required to give a list of where their kiosks are. The lack of location info makes it difficult to target investigations into areas with higher risk of drug or human traffickers, according to the GAO.
The government doesn't know where all the kiosks are.
The report is likely to be influential in Congress. GAO provides nonpartisan recommendations and information to Congress and other policymakers, often setting the tone for complex new topics. The public version of the report contains information that was not included in the original report, which was released in December.
I recommend you read the full public version of GAO's report, which is a detailed look into the state of play when it comes to enforcement. Sex workers can receive money from the websites where drugs are sold for cryptocurrencies.
The FBI recently released a public service announcement to warn the public about high-tech wire transfer fraud, conning people into converting cash intocryptocurrencies and sending it off under false pretenses. Last year, the regulators released a report saying that the amount of money that would be spent on the ransomware business was on track to reach a billion dollars.
Addresses that were tied to illegal activity were responsible for a tiny fraction of the transactions.
Criminal activity makes up a small portion of the transactions. According to a report by Chainalysis, addresses tied to illegal activity only carried out 0.15 percent of the transactions in 2021. The percentage estimate of illegal activity for 2020 has been reduced, but it is likely to go up as it continues to identify criminals' addresses.
The report is coming at a time when the government is ramping up enforcement of unlicensed purchases of the virtual currency. Several people were accused of running an unlicensed money transmission business after federal agents raided their vending machines. The IRS has been asking for more authority to monitor large transactions of cryptocurrencies, and a new tax reporting requirements for miners was included in the recent infrastructure bill.
Jack Dorsey, the former CEO of Twitter, proposed a legal fund to help defend the developers against litigation.
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