The cryptocurrency ecosystem is diverging into an increasingly transparent, well-regulated space and an unregulated crypto underground likely to be exploited for illicit activity and the dark web. Recently, I spoke on a panel that included the chief compliance officer of Bittrex, one of the largest U.S.-based cryptocurrency exchanges, who implied that this divergence will take place in the next several years. But it is happening now.  

The good news is that U.S. agencies are closely tracking crypto-related crime and have the authorities they need to confront most of it. For example, anyone under U.S. jurisdiction running a business exchanging “virtual currencies” is considered a money transmitter and must register with Treasury’s Financial Crimes Enforcement Network (FinCen) and follow the same anti-money laundering (AML) guidelines as money service businesses like Western Union and MoneyGram.