As Prepared for Delivery
Chairman McHenry, Ranking Member Waters, and distinguished Members of the Committee — thank you for the opportunity to testify this morning on behalf of the Financial Crimes Enforcement Network, or FinCEN.
My name is Andrea Gacki, and I am the Director of FinCEN. This is my first time testifying before the Committee since I joined FinCEN last September, and I want to say at the outset how much I appreciate the support of this Committee in our collective efforts to combat illicit financial activity. I look forward to our continued work together.
FinCEN’s Multifaceted Mission
Since joining FinCEN, I have been struck by the range of functions that the organization performs, and what a staff of merely 300 federal employees can accomplish.
And the past year has seen an extraordinary amount of activity by FinCEN. I’d like to briefly touch on some of these accomplishments, organized around three themes: (1) transparency; (2) our swift responses to priority threats; and (3) accountability.
Transparency
First — FinCEN is bringing greater transparency to various structures or sectors that are vehicles of, or destinations for, illicit finance.
Since the Anti-Money Laundering Act, including the Corporate Transparency Act, was enacted, FinCEN’s highest priority has been achieving successful implementation of the beneficial ownership information reporting requirements.
The beneficial ownership information registry successfully launched on January 1, 2024. In the first week alone, more than more than 100,000 companies successfully filed their beneficial ownership information.
I am pleased to report that FinCEN has so far received more than half a million reports.
The now ongoing collection of beneficial ownership information—paired with the forthcoming phased provision of access to the database by law enforcement and other authorized users—will close what has long been identified as a gap in the United States’ anti-money laundering and countering the financing of terrorism regime.
FinCEN has also taken two recent and significant regulatory actions to bring transparency to two distinct areas marked by illicit finance risk.
Last week, FinCEN advanced its efforts to prevent bad actors from misusing anonymous, all-cash purchases of residential real estate to launder or hide the proceeds of crime by proposing a rule to bring greater transparency to the residential real estate sector.
FinCEN is also working to address the known risks associated with investment advisers, which are not subject to consistent or comprehensive AML/CFT obligations in the United States. This week, FinCEN proposed applying AML/CFT requirements to certain investment advisers.
Responding to Priority Threats
Shifting gears, I am proud of the successes that the FinCEN team has achieved in supporting law enforcement and national security agencies as the U.S. government responds to significant and multiple threats, both international and domestic. Much of our work is necessarily “behind the scenes” due to the sensitive information we safeguard and analyze, but I am grateful for the opportunity to call out just a few specific examples of FinCEN’s good work.
Perhaps no issue has been more front and center since I joined FinCEN than addressing the ongoing crisis in the Middle East and, through our focus on the financing of terror, identifying steps we can take to aid our allies in Israel. We are supporting our colleagues at OFAC who have been implementing financial sanctions to degrade and disrupt Hamas’s and other terrorist organizations’ financial networks. And we are directly engaging with stakeholders, including financial institutions, to ensure they are taking steps to prevent illicit financial flows to these organizations without stopping legitimate humanitarian support.
FinCEN has also been working tirelessly with our law enforcement and foreign partners to combat our nation’s opioid crisis. As but one example, FinCEN has convened multiple public-private partnership information exchanges focused on fentanyl. Just last week, FinCEN convened a FinCEN Exchange event in Los Angeles to share information about fentanyl trafficking and related money laundering typologies. Also last week, FinCEN convened its second U.S.-Mexico public-private roundtable with Mexican authorities and financial institutions to advance the fight against this scourge.
FinCEN has also continued its wide-ranging efforts to counter Russian illicit finance, including by issuing Russia-related alerts and advisories to drive reporting by U.S. financial institutions regarding sanctions and export control evasion. FinCEN’s financial experts have pored over more than 16,000 Russia-related filings to identify actionable reports of particular interest to partner agencies since the start of the invasion, referring more than 3,000 filings to law enforcement and other agencies. We continue to support Treasury and law enforcement partners in using Bank Secrecy Act information to map networks facilitating the movement of sensitive items that Russia can use to further its war efforts.
Accountability
Finally, on accountability — FinCEN’s responsibilities as a regulator include ensuring that regulated entities are held accountable, and we take enforcement action where necessary. And this has been a banner year for FinCEN’s enforcement efforts.
To highlight one historic case, FinCEN took an enforcement action late last year and assessed a civil monetary penalty of $3.4 billion—the largest in FinCEN’s and the Treasury Department’s history—on Binance Holdings Ltd. and several affiliates. Binance admitted that it willfully violated the Bank Secrecy Act.
Binance has agreed to address its significant compliance gaps and ensure a complete and timely exit of Binance.com from the U.S. market. These efforts will be subject to supervision through a five-year monitorship overseen by FinCEN—a first in the crypto space. The monitor will also make certain that Binance rectifies the gap it created for law enforcement by filing reports of suspicious activity that it processed in recent years.
This has been a truly collaborative interagency effort, and I’d like to recognize our Treasury partners at OFAC and IRS–CI, as well as our partners at the Department of Justice and Commodity Futures Trading Commission. This unprecedented enforcement action, as well as others FinCEN has taken this year, serve notice to illicit actors that we and our partners remain vigilant to protect the American financial system from illicit or illegal use.
Conclusion
To conclude, it has been an extremely productive year at FinCEN. It quickly became clear when I arrived in September that the FinCEN workforce is steadfast in its commitment to keeping our financial system safe, and I am proud to represent them before you today.
I look forward to your questions.
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