U.S. Treasury Raises Alarm on Cryptocurrency’s Role in Illicit Finance

The U.S. Treasury, through Under Secretary Brian Nelson, is set to address House lawmakers in an upcoming congressional hearing, voicing significant concerns over the exploitation of cryptocurrencies for illicit financial activities. This move shows a growing focus on combating money laundering and other illegal undertakings within the crypto space, with Washington lawmakers efforts to regulate digital assets. Nelson’s testimony will appeal for enhanced legislative support to update the Treasury’s capabilities and resources, aiming to effectively tackle contemporary challenges posed by the virtual asset sector.

For over a decade, the Treasury has been leading efforts to curb terrorism financing, to balance mitigating risks associated with illicit finance while fostering responsible technological advancements. Despite possessing regulatory mechanisms like the authority to penalize non-compliant entities under the Bank Secrecy Act, the Treasury deems its current toolkit insufficient in eradicating illicit finance within the virtual asset sector. Hence, Nelson’s testimony will underscore the department’s plea for Congressional support in implementing “common-sense reforms” to address these challenges effectively.