Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, led by Chairman French Hill (AR-02), is holding a hearing entitled “Crypto Crime in Context Part II: Examining Approaches to Combat Illicit Activity.”
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as delivered:
“After Hamas attacked Israel four months ago, some claimed that these terrorists were using crypto as a primary funding mechanism for their operations.
“Through hearings and confidential briefings, this committee has heard from the intelligence community, blockchain experts, and law enforcement, and we have a better understanding of the scope and scale of crypto’s role in terrorist financing.
“While the reactionary claims proved to be greatly exaggerated in the case of Hamas and Gaza, it’s still important for us to identify and close any potential gaps that can be exploited by criminals and terrorists.
“Just yesterday, here in this room, Under Secretary Nelson testified that terrorists still prefer to use traditional finance rather than digital assets. He also confirmed prior reports that successful international collaboration with Israeli law enforcement had limited Hamas’s use of digital assets ahead of their attack against Israel.
“Today, this committee seeks to understand the tools that law enforcement have to go after bad actors using crypto, as well as to learn what, if any, gaps exist in those law enforcement authorities.
“Just last week, the Financial Times reported that Iran used two of the UK’s biggest banks to evade sanctions, which just goes to show, again, that terrorists will use any means necessary—cash or crypto—to accomplish their means.
“The fact remains that the transparency of public blockchains provides law enforcement with critical data about illicit actors and their networks so that they can be gone after.
“Much of this success can be attributed to partnerships between law enforcement and blockchain analytic firms.
“As bad actors become more proficient, regulators and law enforcement must continue increasing their own capabilities and expertise.
“Let’s be clear: much of the illicit financing through digital assets does not take place here in the U.S. It’s done in offshore, in obviously non-compliant, rogue jurisdictions.
“The borderless nature of blockchain technology necessitates international cooperation.
“Today we will examine what can be done to reinforce the set of tools that FinCEN, OFAC, and the DOJ possess.
“Members on both sides of the aisle are interested in working on solutions.
“This hearing, and the legislation noticed, build off last year’s efforts in both stablecoin and market structure legislation.
“We must ensure that there is a functional regulatory framework in place, so that digital asset companies operate within the U.S. and subject themselves to our laws.
“Last summer, this committee passed bipartisan legislation that would do just that.
“Today, we are fortunate to have an incredible lineup of witnesses to examine our current capabilities to hold bad actors accountable.
“I want to thank each of our panelists for being here, we greatly appreciate your testimony and your willingness to testify.
“I look forward to continuing to work with Ranking Member Lynch and the Members of this Subcommittee, so we are using our time in search of solutions to combat the illicit use of digital assets.”
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