New Bipartisan Bill Targets Crypto’s Dark Side: US House Moves to Combat Illicit Use
Key Takeaways
- The US House approved a bipartisan bill to establish a Treasury task force targeting crypto-related illicit activities.
- The task force will include specialists to develop strategies to prevent criminal misuse of cryptocurrencies.
- Despite House approval, the bill’s future in the Senate remains uncertain as it joins broader efforts to refine cryptocurrency regulation.
Despite being a groundbreaking technology, criminals can exploit cryptocurrencies for illicit activities. The underlying technology’s nearly anonymous payment system makes it challenging for regulators to trace illegal activities.
Therefore, the US House of Representatives recently approved a new bipartisan legislation aimed at curbing the use of cryptocurrencies in illegal financial activities.
Rep. Nunn Introduces Bill to Form Treasury Task Force on Crypto
Representative Zach Nunn (R-Iowa) introduced a bill establishing a temporary government working group within the Treasury Department to investigate the role of cryptocurrencies in terror financing and money laundering.
This working group will comprise industry specialists, including representatives from blockchain intelligence firms, research bodies, and fintech companies. Its goal is to analyze on-chain crypto transactions and develop strategies to prevent malicious actors from using them in activities like terrorism.
Passed on Monday, July 15, the legislation seeks to combat illicit finance and foster collaboration between the public and private sectors to address these challenges. As cryptocurrencies become increasingly prominent as a payment method, Rep. Nunn emphasized the importance of secure and protected access for Americans.
Rep. Nunn stated:
“This bipartisan bill will help ensure the United States is prepared to tackle security risks and curb illegal money movements while safeguarding consumer choice across the country. Addressing these issues concurrently is vital for maintaining the long-term integrity of digital assets.”
House Passes Crypto Legislation Amid Regulatory Overhaul, But Senate Approval Remains Uncertain
Despite receiving approval from the House of Representatives, Rep. Nunn’s cryptocurrency legislation faces uncertain prospects in the Senate. This bill is part of a larger congressional initiative to refine cryptocurrency regulation.
During discussions on the House floor, Rep. Nunn highlighted the importance of legislation in ensuring that the future of financial and internet technology is developed within the United States.
The bill’s introduction coincides with efforts from industry representatives to gain support from Vice President Kamala Harris for the cryptocurrency sector. This push comes after President Joe Biden announced his decision not to seek reelection in 2024. On Monday, July 21, the Digital Chamber appealed to Vice President Harris to endorse the digital asset industry, reflecting the sector’s strategic attempts to influence policy at the highest levels.
Crypto’s Role in Illicit Activities, A Recurring Debate
The issue of cryptocurrencies in illicit activities has been a recurring topic of debate. In January, Senator Warren cited an instance where the Sinaloa Cartel laundered $900,000 using digital assets, using it as a basis to call for stricter cryptocurrency regulations due to the prevalence of illegal transactions facilitated by these modern financial tools.
In response, Senator Lummis then highlighted a significant oversight in Warren’s argument, noting that the same cartel had previously laundered nearly $1 billion through traditional financial systems using fiat currencies.
Senator Lummis argued that the problem does not inherently lie with digital currencies themselves but rather with the criminals who exploit these tools. She warned against the potential mistake of stifling a growing industry by relying on what she considers misleading data, emphasizing the need to focus on the misuse by bad actors rather than the technology itself.
