On June 22, the Senate Banking Committee held a hearing to consider two nominees for the Department of the Treasury (Treasury): Brian Nelson to be Under Secretary for Terrorism and Financial Crimes; and Elizabeth Rosenberg to be Assistant Secretary for Terrorist Financing. Below are several key takeaways.
- Brian Nelson said that cryptocurrency fraud is a top concern for Treasury and that the Anti-Money Laundering (AML) Act of 2020 will help regulate the industry. He explained that cryptocurrencies fall under the Bank Secrecy Act, and, therefore, the Financial Crimes Enforcement Network must have the tools and authority to regulate the sector in a way that prevents cryptocurrencies from undermining AML rules, while also allowing for growth and innovation in financial technology.
- Both Nelson and Elizabeth Rosenberg said the U.S. should work to create an international regulatory standard for cryptocurrencies. Rosenberg said that, unless other countries have equally stringent AML and illicit financing regulations for cryptocurrencies, it will remain easy for criminals to skirt U.S. regulations.
- Sen. Cynthia Lummis (R-WY) said that because of blockchain technology, law enforcement was able to quickly recover almost all of the ransom money paid by Colonial Pipeline after its cyberattack. Sen. Lummis said that far more crime is committed with cash than with cryptocurrencies specifically because of blockchain’s ability to retain transactional records.
- Lummis also said that there should not be universal regulations for cryptocurrencies because assets like bitcoin and Ether, which can be tracked through blockchain, should not be treated like assets that offer more elaborate privacy policies to their users.
- Nelson said that Treasury is on the frontline of protecting American citizens and institutions from cybercriminals. Rosenberg said that Treasury must work with law enforcement to track ransomware footprints.