FinCEN expands their surveillance by broadening what “suspicious” means, rather than define what the behavior is.
March 17, 2025
By: Bobby Casey, Managing Director GWP
Any time there’s a “war on” something, you know that really translates into a heavier police and surveillance state.
War on drugs?
War on money laundering?
War on terror?
War on cash?
Anything that appeals to “national security” is the government writing its own blank check and universal hall pass to trounce your civil liberties.
Put aside the irony of government waging “wars” against drugs, money-laundering, and terror, since they perpetrate these things with greater scale and frequency than anyone in the private sector.
The particular arm of the Department of Treasury in the US that carries all this out is FinCEN, or Financial Crimes Enforcement Network. But for as much as they seek to regulate through incessant reporting, there’s no way to keep up with all of it. Nothing they do inherently homes in on real criminally suspicious activity, but rather makes nearly everyone inherently suspicious.
They broadened what “suspicious” means rather than narrowing what behaviors that would actually entail, and in so doing, FinCEN expands their surveillance and reach.
Know Your Customer (KYC) Regulations
This sounds so passive, and uninteresting, and yet it is the bucket in which all the financial monitoring protocols live. It’s comprised of several actions:
- Verification of the person opening the account. That seems rather boilerplate.
- Risk assessment associated with the types of transactions in which your customer and their business engage. Looking for any “red flags”.
- Ongoing monitoring of customers’ accounts and transactions… again looking for “red flags”.
- Reporting suspicious activity by filing an SAR (Suspicious Activity Report) with the Treasury Department.
The reporting is key here as that is where the public private partnership lies. There are the SARs as well as the CTRs (Currency Transaction Reports), and both fall under the Bank Secrecy Act as obligatory for financial institutions.
Currency Transaction Reports (CTRs) and the $10,000 Threshold:
- Financial institutions must report currency transactions exceeding $10,000 to the Financial Crimes Enforcement Network (FinCEN).
- Multiple transactions that, when aggregated, exceed $10,000 within a single business day, are treated as a single reportable transaction.
Suspicious Activity Reports (SARs):
- Financial institutions are also obligated to report suspicious activity, even if the underlying transaction is below the $10,000 threshold.
- If a currency transaction exceeds $10,000 and is also considered suspicious, both a CTR and an SAR must be filed.
- SARs are confidential and cannot be disclosed
This is all for your safety… of course. But this whole time, FinCEN expands their surveillance and reach.
What has FinCEN been up to?
The short answer is: a bunch of no good. They have a basket of rules that essentially makes everyone a suspect, provided they define what constitutes “suspicious”.
FinCEN participated in obtaining and screening individual account information using keywords like Dick’s Sporting Goods, Cabela’s, Bass Pro Shops, Trump, and MAGA.
This department has been desperately trying to regulate cryptocurrencies:
- In 2013 they declared “administrators or exchangers” of virtual currency qualify as money services businesses under the Bank Secrecy Act (BSA) and FinCEN regulations.
- FinCEN requires money services businesses register with FinCEN and develop, implement, and maintain an AML compliance program.
- FinCEN issued guidance that mixer or tumbler service providers must also comply with the BSA.
- FinCEN has also made clear that AML obligations extend to Decentralized Finance, commonly referred to as DeFi, a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks.
Basically they serve as the main mechanism for financial surveillance. They operate on a low-key presumption of guilt for all who use cash or cryptocurrencies, and meanwhile FinCEN expands their surveillance and reach.
FinCEN and Cartels
After the World Trade Center was struck on 9/11, then president, George W. Bush, declared it an “act of war”. What made that interesting was it changed how laws would activate and even how financial interests would be addressed by way of insurance.
This is what made things so suspicious and had all the tin-foil hats come out: the Silverstein Properties owner, Larry Silverstein, took out a multi-billion dollar war policy on the WTC a very short time before 9/11. No other business thought to do this. So, when Bush declared it an act of war, that allowed Silverstein to collect on the policy.
The point being, the government defines a lot of things like “acts of war” as well as “global terrorist organization”, and that makes a lot of difference in how the government responds. Reuters writes:
On February 19, the State Department designated the Sinaloa Cartel, Tren de Aragua, and six other Latin American criminal groups as global terrorist organizations, part of the Republican administration’s crackdown on gangs it says are flooding the U.S. with drugs and helping migrants cross illegally.
Once the gangs are categorized as “global terrorists organizations”, they are seen differently under the law… just like “acts of war”.
All the anti-terrorist surveillance and scrutiny becomes fair game. So it should come as no surprise that the Treasury Department’s FinCEN $ rolled this out$ :
The GTO (Geographic Targeting Orders) requires all money services businesses (MSBs) located in 30 ZIP codes across California and Texas near the southwest border to file Currency Transaction Reports (CTRs) with FinCEN at a $200 threshold, in connection with cash transactions.
$200 cash transactions are totally normal given the level of inflation the US has experienced. It’s rather common place. Weekly groceries for one person is $200. Getting your hair cut and dyed is over that. A pair of work boots or running shoes could easily clear that. ONE transaction of an everyday product or service.
The original threshold was $10,000. That number is from the 1950s, so if it were adjusted for inflation you’d see that number closer to $120,000. Instead, they dropped it to $200… which would be the equivalent of chasing down $16 transactions in 1952.
The reporting on these low level transactions are going to be creating an insurmountable haystack in which to try and find any needle of impropriety. Reason reports:
[T]he number of CTRs has ballooned far past the point that any bureaucracy could feasibly find it useful. Last year, FinCEN reported that for FY 2023, businesses and financial institutions filed around 20.8 million CTRs—an average of 57,000 per day.
“Inflation may have contributed to the increase in volume of CTRs filed, which has increased by about 62 percent since fiscal year 2002,” according to a December 2024 report from the Government Accountability Office.
Tracking down tiny transactions is a lot of hole-digging and refilling for very little return. A similar thing was attempted with the $600 transactional threshold on P2P platforms like Venmo and Paypal, where everyone who received $600 or more would get a 1099-K. That would entail 44 million forms be sent out.
The number of unbanked people in the poorer areas of the US indexes much higher as well. These people simply do not have enough money to open up a bank account and hold a balance, so they only deal in cash still. I guess they just get swept up in the dragnet? This is what happens when FinCEN expands their surveillance and reach.
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