- The joint legislative bodies of the two parties support the establishment of a new working group to examine the use of crypto and Bitcoin by terrorists.
- This body will consist of representatives from the government, financial institutions, and technology companies.
- Illegal activities related to crypto still account for less than one percent of its total volume and the trend is decreasing.
Both major party legislative bodies want to better understand how terrorists are using the anonymity and lack of oversight of cryptocurrencies for malicious purposes and fight this menace more effectively.
On Thursday, the US House of Representatives considered a bipartisan draft bill that would establish an independent financial technology working group to combat terrorism and illegal financing.
The 2023 Financial Technology Protection Act is the latest version of a bill previously introduced in past sessions. It is an initiative to combat new financial technologies like crypto that affect national security and financial stability.
Both Parties Say No to Crypto Terrorism!
The new version of the bill was jointly prepared by Senators Kirsten Gillibrand (D-NY) and Ted Budd (R-NC) and Representatives Zach Nunn (R-IA) and Jim Himes (D-CT) and aims to establish a working group. According to Yahoo News, Nunn said they will examine the real and potential use of cryptocurrencies and other new technologies by terrorists and criminals.
The new group will consist of officials from central government agencies and departments, including the Central Intelligence Agency, Federal Bureau of Investigation, Department of Justice, Secret Service, Financial Crimes Enforcement Network, and Department of State. In addition, five people appointed by the Terrorism and Financial Intelligence Under Secretary will represent financial technology companies, financial institutions, and research organizations.
The working group will conduct independent research on digital assets, including crypto, and propose regulations. It will submit annual reports to the Treasury Secretary.
As crypto crimes increase, Congress is paying more attention to the interaction between finance, technology, and crime. Last year, illegal transaction volume reached $20.6 billion. Terrorism financing also increased compared to the previous year, but not as much as in 2021.
Visual Source: Chainalysis
Cryptocurrencies and Terrorism Linked to Bitcoin
In the last three years, about 5% of terrorist incidents were linked to crypto or digital assets. According to a UN official in a Bloomberg interview, this figure is now closer to 20%.
Crypto mixers like Tornado Cash have recently had problems due to their role in hiding financial links with organized crime. These crypto mixers work by combining cryptocurrency transactions from multiple users to make the source and destination unclear. Sinbad.io, ChipMixer, and Blender are among the mixers under fire for laundering funds for North Korea. However, strict controls on their use can pose privacy risks.
Illegal activities related to crypto account for less than 1% of its total volume. Although there has been an increase this year, the trend is decreasing.
