Democratic Senator Maggie Hassan has called on federal agencies to tighten regulation to combat the illegal use of crypto assets.
On September 16, Maggie Hassan sent
letter to several US departments, including the Department of Justice (DOJ), the Department of Homeland Security (DHS), the Internal Revenue Service (IRS), the US Securities and Exchange Commission (SEC), and the US Financial Crimes Enforcement Network (FinCEN).
The senator expressed concern about the use of cryptocurrencies by ransomware. She cited the example of a recent incident in Peterborough, New Hampshire. As a result of the cyber attack, the cybercriminals managed to steal $ 2.3 million, and most of it was converted into cryptocurrencies.
“The anonymity of cryptocurrencies allows criminals to use them for various illegal activities: selling drugs through the darknet, committing hacker attacks, evading taxes, financing terrorists, organizing crime and laundering money,” Hassan said in an appeal to regulators.
The senator noted that even if centralized cryptocurrency exchanges implement a personal identification procedure that all their users are required to go through, KYC and AML rules are poorly enforced. As for decentralized exchanges that do not involve a central regulatory authority, many of them do not implement KYC at all.
Therefore, Hassan announced the need to tighten requirements for cryptocurrency exchanges and over-the-counter (OTC) platforms. This will increase the transparency of the cryptocurrency industry both in the US and around the world. In addition, it will prevent the illegal use of cryptoassets and allow the latest technologies to fully develop.
Hassan asked regulators specific questions, what powers they have to regulate trading floors, and what further actions they are ready to take to this end. The senator asked if additional civil penalties and criminal sanctions for the use of cryptocurrencies for illegal purposes would help. Hassan also proposed setting an additional waiting period when converting fiat currencies to cryptocurrencies so that the risk of these transactions can be assessed.
In January, the senator already spoke on this topic with Janet Yellen, who at the time was a candidate for the post of US Treasury Secretary. Yellen called cryptocurrencies a threat and a “special problem” for law enforcement.