U.S. Treasury Secretary nominee Janet Yellen has said the illicit use of cryptocurrencies like Bitcoin in money laundering and other financial crimes was a “particular concern,” sparking suggestions tighter regulation could be in the pipeline. The former chair of the Federal Reserve made the comments at her confirmation hearing in the U.S. Senate, highlighting the difficulties facing law enforcement in tackling money laundering and terrorism financing posed by cryptocurrencies.
“The government needs new tools to prevent money laundering through cryptocurrency exchanges.”
Yellen stated in response to Senator Maggie Hassan (D-NH) a question about what the Treasury would do to curtail the threats of financial crime from emerging technologies. In the question, Sen. Hassan specifically mentioned the threat posed by digital currency, winning the agreement of Yellen in response. The comments already fueled speculation about the implications for digital currency regulation, should Yellen be confirmed as Treasury Secretary in due course. She suggested that the government needs new tools to prevent money laundering through cryptocurrency exchanges. Digital currencies that “many are used at least in a transactions sense mainly for illicit finance,” she added.
Crypto regulations under the new administration might favor the industry.
“You’re absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology. Cryptocurrencies are a particular concern. I think many are used—at least in a transaction sense – mainly for illicit financing,” Janet Yellen noted. The comments could highlight the upcoming change in policy direction towards cryptocurrency as the new Biden administration is ushered into office. As reported earlier, U.S. President Joe Biden halted the FinCEN’s new crypto wallet regulations on his first day at the office.