The US House of Representatives has approved a new cryptocurrency bill aimed at curbing its use for illegal finance. The legislation, introduced by Representative Zach Nunn (R-Iowa), seeks to establish a governmental working group to assess cryptocurrency in terrorism and money laundering activities.
This bipartisan effort aims to enhance public-private collaboration in addressing illicit finance within the digital asset space. As cryptocurrencies become a prevalent payment method, Rep. Nunn emphasized the necessity to secure access for Americans while protecting them from illicit financial activities.
“This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also protecting consumer choice for all Americans,” said Rep. Nunn. He stressed the importance of addressing these challenges collectively to “ensure the long-term integrity of digital assets.”
The bill echoes broader initiatives seen in the House, like the Financial Innovation and Technology for the 21st Century Act (FIT21). However, the Senate has yet to show similar enthusiasm for crypto-related legislation.
In a speech on the House floor, Nunn described the legislation as “crucial in strengthening America’s national security” and vital for “protecting digital assets and ensuring the next generation of financial and internet technology is built right here in America.”
The proposed working group, under the Treasury Department, aims to include experts from blockchain intelligence, research institutions, and fintech companies. Their goal is to explore crypto transactions and strategies to deter exploitation by malicious actors.
Jaret Seiberg, an analyst at TD Cowen, suggests the bill responds to crypto critics calling for tougher anti-money laundering measures, providing political leverage for the industry.
The bill’s introduction coincides with efforts to garner support from Vice President Kamala Harris, following President Joe Biden’s announcement of not participating in the 2024 Presidential race.
In April 2023, the U.S. Department of the Treasury reported vulnerabilities in decentralized finance (defi) that criminals exploit to move and launder illicit funds. These include non-compliance with anti-money laundering and counter-terrorism regulations and weak cybersecurity in some services.
Reports from October indicated cryptocurrency might have facilitated funding for the Hamas attack on Israel, showing how such transactions can circumvent conventional banking systems.
