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US Treasury Official Calls for Increased Regulatory Powers on Crypto to Combat Illicit Finance

Algoine News
Summary:
A U.S. Treasury official has urged the House Financial Services Committee to grant more regulatory powers to tackle illicit financing in the crypto market. This follows increased political scrutiny over the misuse of cryptocurrencies for money laundering and financing terrorism. Proposed measures include updating legislation, improving support, and introducing new sanctions tools to hold non-compliant firms accountable. The appeal aligns with the release of the Treasury's 2024 National Risk Assessments highlighting the risks of cryptocurrencies in illicit finance. A digital assets-focused hearing will be held on February 15 to address these concerns within the cryptocurrency sector.
A U.S. Treasury representative has expressed apprehension concerning the role of cryptocurrency in illegal financial activities to the House Financial Services Committee, calling for expanded regulatory powers to effectively tackle the issue. This was communicated in prepared remarks for a congressional hearing scheduled for February 14. The Treasury requests enhanced legislation and support for effective solutions. Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, underlined this request during a congressional hearing focused on terrorism and crimes involving cryptocurrency. The statement aligns with increased scrutiny from Washington politicians, including Senator Elizabeth Warren, who has been advocating for her anti-money laundering legislation. Sen. Warren re-tabled the Digital Asset Anti-Money Laundering Act (DAAMLA) in the U.S. Senate in July 2023, aimed specifically at prohibiting the illegal utilization of crypto assets for money laundering and terrorism financing purposes. Building a strategy to prevent terrorism financing has been the Treasury's focus for the past decade, with the goal of balancing promotion of innovation with mitigating illicit finance risks, according to Nelson's testimony. The Treasury has means to address certain issues, such as holding firms accountable if they don't adhere to the Bank Secrecy Act's stipulations, designed to assist in combating and discovering money laundering and other financial crimes. Nelson stated, "To eradicate illicit finance in virtual asset markets and forums, we require more tools and resources. We are keen to collaborate with Congress to implement pragmatic reforms that modernize our capabilities and authorities to meet today's evolving challenges." In 2023, the Treasury Department proposed extended legislative powers in discussions with lawmakers. This included the introduction of fresh sanctions tools to target offenders in the cryptocurrency sphere. The department highlighted the requirement for greater regulatory oversight of stablecoins, though these weren't explicitly referred to in Nelson's statement. Post the release of Treasury's 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, Nelson's comments emerged. These assessments outlined the inherent dangers and risks associated with illicit financing within the U.S., including the cryptocurrency industry. They stressed that while cash is the primary method used for drug laundering, malevolent characters increasingly utilize virtual assets. On February 15, the House Financial Services Committee's panel on digital assets will address cryptocurrency and related illegal activities at its hearing.

Published At

2/14/2024 10:59:37 AM

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