A Treasury official in the United States has raised concerns about the use of cryptocurrencies in illegal financial activities in a statement to the House Financial Services Committee, requesting more power to combat these activities. The committee is scheduled to hold a hearing on this matter on February 15.
Brian Nelson, the Treasury’s Under Secretary for Terrorism and Financial Intelligence, made this request in his statement prepared for a congressional hearing focused on terrorism and crimes involving cryptocurrencies.
This call for more authority comes when Washington lawmakers, including Senator Elizabeth Warren, pay more attention to crypto-related crimes. Senator Warren has been advocating for her Anti-Money Laundering bill, the Digital Asset Anti-Money Laundering Act (DAAMLA), reintroduced in July 2023, which aims to curb the illegal use of cryptocurrencies for money laundering and financing terrorism.
Nelson mentioned that the Treasury has been developing a framework for over ten years to fight the financing of terrorism that balances the risks of illicit finance with the encouragement of responsible innovation.
Although the Treasury currently has some measures in place, such as the ability to penalize firms not complying with the Bank Secrecy Act, Nelson believes more tools and resources are necessary. He stated, “We are eager to work with Congress to bring in common-sense reforms that will strengthen our capabilities to deal with the modern challenges we face today.”
In 2023, the Treasury proposed to lawmakers several ways to extend its powers, including introducing new sanctions specifically for those misusing cryptocurrencies. The department also highlighted the importance of more rigorous oversight of stablecoins, though this wasn’t directly mentioned in Nelson’s statement.
Following the Treasury’s 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, Nelson’s comments come in light of these reports. They identified various threats and vulnerabilities related to illicit finance in the U.S., pointing out increased criminals using digital assets.
The House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Inclusion is planning a hearing on February 15 to look into cryptocurrencies and their role in illegal activities specifically.
