A United States Treasury official has voiced apprehensions regarding the role of cryptocurrency in illicit finance during a statement to the House Financial Services Committee. The official highlighted the necessity for additional authority to combat nefarious actors operating within the crypto space. The committee hearing to address this issue is scheduled for Feb. 15.
Brian Nelson, the Treasury’s Under Secretary for Terrorism and Financial Intelligence, reiterated this plea in his prepared statement for the upcoming congressional hearing focused on terrorism and cryptocurrency crimes.
Nelson’s statement aligns with the growing focus from Washington lawmakers, notably Senator Elizabeth Warren, who has been advocating for her Anti-Money Laundering bill. The reintroduced Digital Asset Anti-Money Laundering Act (DAAMLA) targets the illicit use of cryptocurrencies for money laundering and terrorist financing.
The Treasury has dedicated the past decade to developing a framework aimed at combating terrorism financing while fostering responsible innovation, Nelson emphasized in his prepared testimony. However, he acknowledged the need for additional tools and resources to tackle illicit finance effectively.
In 2023, the Treasury Department proposed expanding its powers to address issues in the cryptocurrency space, including the introduction of new sanctions tools. Moreover, there was an emphasis on the necessity for enhanced supervision of stablecoins, although this aspect was not explicitly mentioned in Nelson’s statement.
Nelson’s remarks follow the release of the Treasury’s 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, which highlighted threats associated with illicit finance, including within the cryptocurrency sector. The reports underscored a growing trend of bad actors utilizing virtual assets, alongside traditional methods like cash, for illegal activities.
The Subcommittee on Digital Assets, Financial Technology, and Inclusion of the House Financial Services Committee is slated to hold a hearing on Feb. 15 specifically focusing on cryptocurrency and illicit activities.
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