According to US Treasury Secretary Janet Yellen, the use of cryptocurrencies for drug trafficking and terrorist financing is a “growing problem”.
During a round table on innovation policy in the financial sector, US Treasury Secretary Janet Yellen warned that the number of crimes and cyber attacks related to digital currencies is increasing.
“I see the promise of these new technologies, but I also see the reality: cryptocurrencies are being used to launder the proceeds of online drug traffickers and as a tool to finance terrorism,” she said.
Yellen referred to the Anti-Money Laundering Law passed by Congress last December, which became part of the National Defense Authorization Act. The new law requires the U.S. government to update its anti-money laundering and anti-terrorist financing measures. Yellen noted that the existing regulatory framework was created in the 1970s and has hardly been updated since then.
“The update of the legislative framework came at the most appropriate time. As you are all well aware, we live in an environment of dramatically increasing risks associated with fraud, money laundering, terrorist financing and data privacy,” she said.
In January, Yellen said that cryptocurrencies are a particular problem for law enforcement agencies, and that they can improve the efficiency of the financial system. This week, she said that the Treasury Department, together with the regulators within it, “can better stop the flow of dark money.”
“We will have more opportunities to prevent attackers from breaking into our government offices or interfering in our elections,” she added.