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A congressional hearing set to take place later today could play a significant role in shaping legislation led by Republicans, with a focus on preventing money laundering in the crypto market. The House of Representatives Financial Services Committee will convene a panel focusing on crypto assets titled Context of Crypto Crime Part II: Examining Approaches to Combating Illegal Activities.
US Takes Steps on Crypto Regulation
A subcommittee led by Republican French Hill of Arkansas will discuss how often terrorist groups turn to the crypto space to finance their operations compared to traditional finance, and the regulatory gaps in anti-money laundering requirements for crypto firms.
According to prepared statements, lawmakers will hear from policy and legal experts from Circle, Coinbase, TRM Labs, and others, planning to discuss how legislation should be shaped to pursue bad actors, how the blockchain space can be monitored, and how decentralized finance factors into this.
The session occurs at a time when both Democrats and Republicans are intensely focusing on AML provisions and bills. Last summer, the House Financial Services Committee developed two bills, one of which would adopt a comprehensive approach to regulating crypto. As of last month, Representative Hill mentioned that the larger bill includes an AML provision and signaled a willingness to listen to ideas from Democrats as well.
Crypto Sector and Illegal Activities
Punchbowl News’ reported in December that the Chairman of the House Financial Services Committee, Patrick McHenry, also stated that the House needs to take a closer look at AML rules for crypto. On the other side of the aisle, Senate Democrats are working on a bill by Senator Elizabeth Warren of Massachusetts to expand AML responsibilities to crypto asset service providers, miners, validators, and other branches of the sector in the fight against money laundering.
On February 14th, the House Financial Services Committee held a session to review the efforts of the US Treasury Department and the Financial Crimes Enforcement Network, where some lawmakers addressed the issue of crypto.
At this session, Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson was questioned about a Wall Street Journal report published in October that indicated illegal organizations used millions of dollars in crypto as a financing tool. The data in this article came from blockchain forensics firm Elliptic and since then, the firm has clarified that the figures were misrepresented in the article.
