On June 20, the Subcommittee on prevention of money laundering and financing of terrorism of the Committee on financial services of the house of representatives of the U.S. Congress held hearings on the use of digital currencies for illicit purposes. At the hearing a report (PDF) was made by Robert of Novi, Deputy assistant Director of the U.S. Secret service. In addition to their stance against cryptocurrencies expressed by the members of the house of representatives and representatives of the financial departments of the USA.
Novi asked Congress to help prevent use for unlawful purposes cryptocurrency with a high level of anonymity, such as Monero and zcash for. He urged “to consider additional legislative or regulatory measures” for dealing with potential problems.
He also remembered about bitcoin-mixers — online services that allow you to hide the flow of a transaction in the blockchain.
Greg Nevano, an employee of the Department of investigation the Immigration and customs enforcement of the United States, supported the concerns of Novi regarding this class of cryptocurrency and noted that “to trace the movement of illegally obtained funds through these new cryptocurrencies is difficult, but not impossible.”
Novi urged American legislators to provide law enforcement powers that would ensure access to evidence in digital form. He said
I draw the attention of Congress on the preservation of legitimate law enforcement access to essential sources of evidence regardless of where and in what form that information is stored.
His speech demonstrated that, despite the rapid development of the stock market, in the eyes of politicians and law-enforcement bodies of the USA the digital currency continues to act as a tool of criminals. At the hearing, a member of the house of representatives Robert Pittenger said that one of the biggest threats to U.S. national security remains illegal the use of “virtual currency, or cryptocurrency”.
Thomas Ott, Deputy Director of the Department to ensure the legality of the Commission for the investigation of financial crimes of the United States (FinCEN), noted that “traditional financial methods dominate in illegal activities, however, FinCEN believes that virtual currencies are specific risks of illicit financing, which, without vigilance and appropriate measures can grow.”
The hearing was marked by the global nature of cryptocurrency and related issues of jurisdiction and the need for coordinated international cooperation through the Group of development of financial measures of struggle against money-laundering (FATF). The complexity in this issue lies in the lack of consistency in the regulatory framework for combating money laundering at the international level, which allows attackers to use a jurisdiction that has no interest in fighting such illegal activities. Ott said
We have made great strides in addressing these regulatory gaps in countries such as Australia, Japan and South Korea, but in most jurisdictions still do not exist the regulatory framework for virtual currency.
Nevano also allocated unregistered decentralized exchange as one of their main areas of money laundering and other illegal activity:
Although some p2p exchanges are registered and comply with the laws, most of them do not. These illegal p2p exchanges are positioning themselves as locations for money laundering in the world of cryptocurrency. One of these types of exchanges receiving illegal income by charging a fee for allowing its customers to remain anonymous.
According to Nevano, his Agency as of April 2018 confiscated cryptocurrency worth more than $25 million.
Forbes on materials