FinCEN Director Warns of 'Hard Time' for Crypto Firms That Don't Follow Law

There is no ambiguity: crypto startups must follow U.S. anti-money-laundering laws or else suffer the consequences, said the nation's top AML regulator.

Kenneth Blanco, director of the Financial Crimes Enforcement Network, warned the crypto industry Monday to take heed of the Bank Secrecy Act and other AML regulations when setting up businesses - because his agency certainly will.

Blanco, who spoke at Georgetown University as part of the first day of DC Fintech Week, told moderator Chris Brummer that companies have no excuse for not knowing the law.

"What we tell everybody is if you're going to innovate, you better make sure that you're complying with your regulations prior to executing that innovation or prior to going to market," Blanco said.

"You have to make sure that you comply with the law first and then you can execute and get to market. Otherwise that's not happening I'll tell you if you can't comply with your BSA, you're going to have a problem you must comply and we as a regulator, as the primary regulator and the administrator of the BSA, we will make sure that you do and you're going to have a hard time if you don't."

FinCEN won't accept that a company "Can't" comply with the law either, he said.

Any firms which do not believe they are able to fulfill the requirements in the BSA should not come to market, Bianco said.

Blanco's comments come at a time when industry observers expect enforcement actions around money laundering, due in part to a recent joint statement FinCEN published with the Securities and Exchange Commission and Commodity Futures Trading Commission.

Warnings aside, Blanco praised the idea of innovation, though he warned of potential national security risks throughout his speech.

"Your car is going to have to adapt. Otherwise, it's not coming on the road, bottom line, and that's the message."