Biden Administration Releases Strategy to Curb Illicit Use of Cryptocurrency

The Joe Biden administration, through the White House’s website, has just released a novel 38-page report explaining efforts to tackle state and financial corruption. Interestingly, the report revealed that effort will get channeled into five strategic pillars, one of which mentions the new “National Cryptocurrency Enforcement Team.”

According to the statement, the strategic anti-corruption efforts focus on cutting down “the ability of corrupt actors to use the US and international financial systems to hide assets and launder the proceeds of corrupt acts.”

In pillar 3, titled “Holding Corrupt Actors Accountable,” the report noted that the Department of Justice (DOJ) would tackle the use of crypto in illicit activities through a new task force specially assigned for that reason. The report detailed that: o

“DOJ will utilize a newly established task force, the National Cryptocurrency Enforcement Team, to focus specifically on complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”

Money laundering in the crypto industry remains a pressing concern for regulators, especially stablecoins. US regulatory bodies, including the Fed, SEC, and Treasury Department, see fiat-pegged cryptos (stablecoins) as an unregulated channel for global payments with the capacity to scale rapidly across illegal payment platforms due to the significant liquidity they hold.

Biden Administration Ready to Work with Other Nations to Tackle Illicit Crypto Use

Meanwhile, pillar 2 titled “Curbing Illicit Finance,” reaffirms the United States’ efforts to tackle risks presented by digital assets and commitment to cooperating with other nations and authorities in developing a central bank-issued digital currency.

While the report acknowledged the numerous usefulness of digital assets in today’s economy, it highlighted several illicit uses of crypto, including narcotics trafficking, terrorism financing, and sanctions evasion.

Over the past few months, cryptocurrencies have become an increasingly common tool in ransomware attacks. Because of the permanent nature of cryptocurrency transactions, victims of hacks or theft have no way to recover their funds.

 

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