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Cryptocurrency’s role in crime investigated by US house subcommittee

In this post:

  • Collaboration is vital to combat crypto crime effectively.
  • Misinformation can influence crypto legislation with security consequences.
  • The urgent call for well-crafted crypto regulations is bipartisan.

The United States House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion convened a hearing titled “Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets” on November . The bipartisan hearing emphasized the importance of collaboration and regulation in addressing the use of blockchain technology in criminal activities.

Chair French Hill initiated the hearing by referring to a Wall Street Journal article from October 10, which highlighted the use of cryptocurrency by Hamas for fundraising. Hill noted that the article had been corrected on October 27 to accurately reflect data provided by blockchain analytics firm Elliptic. He underscored that just as phones and the internet should not be blamed for terror financing, cryptocurrencies should not be scapegoated either.

US house on crypto crime, actions and concerns

Subcommittee ranking member Stephen Lynch expressed the hope that preconceived notions about cryptocurrencies could be set aside for a more informed discussion.

The panel of witnesses included representatives from ConsenSys and Chainalysis, forensic experts, and a senior counsel from law firm Hogan Lovells. They emphasized the importance of international collaboration and public-private partnerships in preventing the misuse of digital assets. Additionally, they highlighted the necessity for well-crafted legislation and the complexities of tracing blockchain transactions.

During the hearing, Representative Brad Sherman sought an example of a legitimate use of a crypto mixer from Alison Jimenez, President of Dynamic Securities Analytics. However, Jimenez was unable to provide a satisfactory response.

Several prominent members of Congress, including Chair Patrick McHenry, Representative Tom Emmer, Representative Ritchie Torres, and 53 additional House members, sent a letter to U.S. President Joe Biden and Treasury Secretary Janet Yellen on November 15. The letter inquired about the fundraising activities of Hamas and Palestinian Islamic Jihad and the role of cryptocurrency in these efforts. It stressed the importance of understanding the scale of Hamas’s digital asset fundraising campaign in comparison to its traditional fundraising methods.

The letter pointed out that traditional methods of fundraising could potentially generate more revenue than cryptocurrency, and Congress sought accurate information on blocked or forfeited digital assets associated with terrorist organizations. The letter referred to the Wall Street Journal article that brought attention to this issue.

Concerns raised by the Blockchain association

On the same day, the Blockchain Association issued an open letter addressed to Chair French Hill and other members of the Financial Services Committee. This letter was signed by 40 former members of the U.S. military, intelligence officers, and national security professionals who are now affiliated with digital asset companies or venture capital firms. They expressed concerns about the Wall Street Journal article, describing it as “grossly overstated” and “debunked.”

The signatories were worried that the article’s inaccurate information was being used to support legislation that could be detrimental to U.S. national security interests. They emphasized that fostering the growth of a regulated and compliant digital asset industry in the United States would be the most effective way to combat illicit actors.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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