News
US House Representative Approves New Bill Aiming to Tackle Illicit Cryptocurrency Finance
The U.S. House of Representatives has passed a new cryptocurrency bill aimed at limiting its use for illicit financial purposes.
Introduced by Representative Zach Nunn (R-Iowa) on Monday, July 22, the legislation aims to establish a government working group to assess the use of cryptocurrencies in terrorist and money laundering activities.
This bipartisan effort is aimed at improving public-private collaboration in the fight against illicit finance in the digital asset sector.
As cryptocurrencies become an increasingly popular payment method, Congressman Nunn stressed the need to provide Americans with secure access while protecting them from security risks and illicit financial activity.
“This bipartisan bill will help ensure that the United States is prepared to address security risks and prevent money laundering, while protecting consumer choice for all Americans,” She said Representative Nunn.
He also stressed the importance of addressing these challenges collectively to “ensure the long-term integrity of digital assets.”
The bill also reflects broader, industry-friendly initiatives already introduced in the House, such as the Financial Innovation and Technology for the 21st Century Act (FIT21).
However, the Senate has yet to show the same level of enthusiasm for cryptocurrency legislation.
In a speech On the floor of the House, Nunn described the legislation as “crucial to strengthening the national security of the United States” and vital to “protecting [the nation’s] digital assets and ensuring that the next generation of financial technology and the Internet is built right here in America.”
The proposed working group, which would operate out of the Treasury Department, aims to include experts from a variety of fields, including blockchain intelligence, research institutions and fintech companies.
Their goal would be to explore cryptographic transactions and strategies to discourage exploitation by malicious actors.
According to Jaret Seiberg, an analyst at TD Cowen, the bill serves as a response to cryptocurrency critics who have called for tougher measures on money laundering. He suggests that the legislative move provides political leverage to counter criticism of the cryptocurrency industry.
Furthermore, the introduction of the bill coincides with a proactive action industry efforts to win support from Vice President Kamala Harrisespecially after President Joe Biden announced his non-participation in the 2024 presidential race.
In early April 2023, the U.S. Department of the Treasury highlighted in a Reporting vulnerabilities in decentralized finance (defi) which criminals exploit to move and launder illicit funds.
These include the failure of many terrorist financing services to comply with anti-money laundering and counter-terrorist financing regulations, as well as weak cybersecurity measures in some services and insufficient regulatory frameworks in some jurisdictions.
October reports also indicated that Cryptocurrency may have facilitated financing for Hamas’ attack on Israel, demonstrating how such transactions can bypass conventional banking systems.