US Treasury Asks Congress to Crack Down Against Illegal Activities in Crypto

US Treasury Asks Congress to Crack Down Against Illegal Activities in Crypto

Brian Nelson, an official at the United States Treasury recently initiated a directive addressing Congress about cryptocurrency investments. The House Financial Services Committee received the proposal concerning illegal financial activities using cryptocurrencies.

On this account, the Treasury Department has expressed reservations and urged the House Financial Services Committee members to take action against illegal traders. The committee set the next meeting on 15th February 2024.

Importance of Crypto Regulations

Brain Nelson is the Under Secretary for Treasury supervising the Terrorism and Financial Intelligence. During his statement presentation to the House legislators, he pushed for the importance of crypto transaction regulations. He issued the statement during a congressional hearing about terrorism and crypto-based crimes. The Treasury Department intends to gain more regulatory power to introduce new policies for crypto firms.

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The statement from Nelson arrived at a time when similar voices had started to rise among Washington legislators. One voice is Senator Elizabeth Warren who has continued to make efforts for advancing the Anti-Money Laundering bill titled DAAMLA. The bill was first introduced in the Senate in July 2023. If approved it holds the power to curb illegal activities via crypto such as money laundering and terror financing.

Treasury Department to Create a Crypto Regulatory Framework

The Treasury Department has gathered information and conducted research regarding the crypto regulatory framework for years. The main focus of the regulations is to halt terror financing and mitigate financial risk exposure without hindering technical development.

Nelson further stated that the Treasury Department does not have the tools to address these issues such as penalizing firms for violating the Bank Secrecy Act.

Furthermore, the department intends to assist financial institutions in preventing and detecting various types of financial crimes. Nelson further briefed that it is necessary to detect illicit financial activities taking place in virtual asset platforms.

To make this happen, he requested suitable tools and resources and worked in tandem with Congress to introduce reforms that would update tools and authorities to face the challenges that investors face at large.

The Treasury Department issued various proposals in 2023 for expanding the existing legislative infrastructure. These proposals were inclusive of sanctioned tools that will be able to contain wrongdoers in the crypto sector. Treasury also talked about the importance of additional supervision for stablecoins but Nelson made no such mentions.

Recently, the Treasury published the National Risk Assessment Report on Money Laundering, Terror Financing, and Proliferation Financing. The report identified various risks and threats associated with the crypto sector in the USA.

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House Financial Services Committee Arranges Meeting on Treasury Concerns

The report published by the Treasury Department in 2024 encompassed all the reservations about cryptocurrencies. However, the report noted that the majority of illegal drug trade happens via cash but money laundering is done using cash.

Furthermore, there is a growing trend of bad actors utilizing virtual assets. The Treasury Department has a plan to charge a number of businesses and financial institutions to restrict crypto transactions via sanctions and initiate a trial for allegedly making such offerings.

To address the concerns, the House Financial Services Committee and Subcommittee on digital assets and financial technology have organized a hearing on 15th February. The agenda of the hearing is to discuss illegal activities taking place in the cryptocurrency sector.

In a statement issued earlier on 15th February 2024 Brain Nelson stated that terrorist organizations such as Hamas prefer traditional financing methods nothing that cryptocurrencies are not their prime modus operandi.

Talking on the matter, Nelson noted that the usage of cryptocurrencies within the terrorist organization is not expected to be very high. He issued the statement during this testimony at the House Financial Services Committee. Speaking on the matter, Representative Tom Emmer noted that the actual amount Hamas uses in the form of cryptocurrency investments is smaller to initial projections.

The representative has also initiated a request to Congress for updated data records about the relationship of cryptocurrencies with terror financing. Meanwhile, the Chairperson for Banking Affairs, Senator Sherrod Brown has also started a request to address the matter of terror funding via cryptocurrencies.

Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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