Nikolas Sargeant
A senior official from the United States Treasury is urging Congress to grant additional powers to combat crypto-related illicit activities. Brian Nelson, the Under Secretary for Terrorism and Financial Intelligence, expressed his concerns during a statement to the House Financial Services Committee, highlighting the necessity for increased authority to pursue wrongdoers in the cryptocurrency space. The committee hearing is scheduled for February 15.
Nelson emphasized the request for enhanced powers in his prepared statement for a congressional hearing focused on terrorism and cryptocurrency crimes. This call for action aligns with the growing attention from Washington lawmakers, notably Senator Elizabeth Warren, who is advocating for the Anti-Money Laundering bill. Warren's Digital Asset Anti-Money Laundering Act (DAAMLA), reintroduced to the U.S. Senate in July 2023, specifically targets the illicit use of crypto assets for money laundering and terrorism financing.
In his testimony, Nelson acknowledged the Treasury's decade-long efforts to create a framework aimed at countering the financing of terrorism while promoting responsible innovation. Despite existing tools, such as holding non-compliant firms accountable under the Bank Secrecy Act, Nelson stressed the need for additional resources and tools to address illicit finance in virtual asset markets.
The Treasury Department had previously proposed expanding its powers in 2023, suggesting new sanctions tools to address wrongdoers in the cryptocurrency space. While the need for increased supervision of stablecoins was highlighted in previous Treasury suggestions, Nelson's statement did not explicitly mention this aspect.
Nelson's comments coincide with the release of the Treasury's 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. These assessments identified threats and risks related to illicit finance in the U.S., including the cryptocurrency sector. The reports emphasized the growing trend of bad actors utilizing virtual assets, even though traditional cash remains the primary medium for drug-related money laundering.
The Subcommittee on Digital Assets, Financial Technology, and Inclusion of the House Financial Services Committee is set to conduct a hearing on February 15, specifically addressing cryptocurrency and its association with illicit activities.
