The United States Treasury is gearing up to address Congress on the emerging challenges posed by cryptocurrencies to existing financial regulatory frameworks.

In his prepared testimony for the House Financial Services Committee, Brian Nelson, Treasury’s Under Secretary for Terrorism and Financial Intelligence, planned to detail the agency’s concerns regarding the use of virtual assets in illicit financial activities.

Nelson Highlights Treasury’s Focus on Illicit Finance

“Treasury is deeply concerned about the use of virtual assets for all illicit financial activity,” said Nelson. “We have been working for over a decade on implementing an AML/CFT framework for digital assets that mitigates illicit finance risks while promoting responsible innovation.”

According to Nelson, the Terrorism and Financial Intelligence unit have been monitoring the evolving tactics and technologies utilized by unlawful groups to generate and transfer funds.

“While we continue to assess that terrorists’ use of digital assets remains a small fraction of more established mechanisms to move money,” said Nelson. “We recognize that terrorist groups have and may continue to turn to digital assets to raise, transfer, and store their illicit proceeds.”

Nelson demonstrated the unit’s particular emphasis on Hamas-related activities, saying, “Such as our recent multilateral action against several of Hamas’s funds transfer networks that relied on several key exchanges to funnel proceeds to the group.”

Blockchain Association Raises Concerns Over Warren’s Proposed Bill

U.S. Senator Elizabeth Warren introduced the Digital Asset Anti-Money Laundering Act of 2023 (DAAMLA), a bill that has stirred significant debate within the crypto community.

JUST IN US Senator Elizabeth Warren drops a BOMBSHELL on the Blockchain Association!

Demanding the Blockchain Association expose information on ex-military and government hires—roles, pay, and all! Claiming the Blockchain Association has been working to undermine… pic.twitter.com/pSkanu8wUN

— Good Morning Crypto (@3TGMCrypto) December 19, 2023

Garnering the support of 19 other Senators as co-sponsors, the bill was intended to strengthen regulations around the use of digital assets in illicit finance.

The Blockchain Association expressed its concerns through a letter to the House Financial Services Committee and Senate Banking Committee, marking the second time the association has reached out to lawmakers.

“The Digital Asset Anti-Money Laundering Act (DAAMLA) risks our nation’s strategic advantage, threatens tens of thousands of U.S. jobs, and bears little effect on the illicit actors it targets,” said the Association.

The Association argued that Warren’s allegations overlooked the substance of their arguments and unfairly questioned the motivations of numerous U.S. military and intelligence veterans involved in the discussion.

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