A Section 311 designation, under the USA PATRIOT Act, identifies a foreign jurisdiction, institution, or class of transactions as a primary money laundering concern. This designation by the U.S. Treasury’s FinCEN allows for the imposition of special measures to protect the U.S. financial system from illicit finance risks. These measures can include enhanced due diligence requirements or prohibitions on certain financial activities. It is a powerful tool to counter money laundering threats.
Context
Section 311 designations have gained relevance in the digital asset space as FinCEN increasingly applies these powers to virtual asset service providers or jurisdictions perceived as high-risk for illicit crypto flows. Discussions often center on the extraterritorial reach of U.S. financial regulations and the impact on global digital asset markets. Future developments will likely involve continued application of Section 311 to address emerging money laundering vulnerabilities within the crypto ecosystem.
The record $15B forfeiture and SDN listing of crypto addresses establish a new, quantifiable standard for global VASP AML/CFT compliance and illicit fund tracing.
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