An official with the United States Department of the Treasury says rooting out illicit finance by players in the crypto industry calls for additional tools and resources.
In his written testimony for a House Financial Services Committee hearing, Treasury Under Secretary for Terrorism and Financial Intelligence (TFI) Brian Nelson says published risk assessments of virtual assets show that threat actors, including ransomware cybercriminals, North Korea’s cyber actors, scammers and terrorist groups misuse crypto.
He says bad actors use crypto assets to profit from illegal activities by taking advantage of vulnerabilities such as jurisdictional arbitrage and the failure of financial institutions to comply with their anti-money laundering and combating the financing of terrorism (AML/CFT) obligations.
Nelson explains how the TFI addresses these challenges.
“[W]e have tools to address some of these vulnerabilities, such as using our authorities to hold accountable firms that fail to comply with their Bank Secrecy Act and sanctions obligations.
We also use our tools, sometimes in novel ways, to disrupt illicit actors’ ability to use virtual assets.”
However, Nelson says that the evolving threats now require better tools and resources to effectively address illegal transactions in the crypto space.
“[T]o root out illicit finance by players in virtual asset markets and forums, we need additional tools and resources. That is why we are eager to work with Congress to adopt common-sense reforms that update our tools and authorities to match the evolving challenges we face today.”
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