U.S. Treasury Secretary Janet Yellen has expressed the need for increased authority within the Treasury Department to address the alleged utilization of crypto by terrorist groups.
Senator Sherrod Brown, known for his role in shaping crypto legislation, questioned Yellen about the necessary updates required to confront this issue during the Senate Banking Committee hearing.
Democrats Raise Concerns About Crypto Use by Terrorist Groups
While the focus of the hearing primarily revolved around broader economic discussions, some Democrats raised concerns about the misuse of cryptocurrencies by malicious actors.
“We know that terrorist groups like Hamas, Al-Qaeda, and Hezbollah have used digital assets to raise and transfer funds. We have important tools to counter illicit finance, but most of them date back to the post-9/11 era,” Senator Brown said.
“As terrorists continue to innovate, do we need to update our counter-terrorism tools, Madam Secretary, to respond to the risks created by digital assets?”
Yellen acknowledged that the Treasury Department could benefit from additional authority to address the issue.
“We do have many authorities that enable us to act, but we’ve identified a number of gaps in our authorities and have compiled a list of suggestions for ways in which Treasury’s authorities could and should be strengthened,” She stated.
Janet Yellen calls on Congress to pass #Crypto regulations which includes #stablecoins and spot markets for crypto.#bitcoin #cryptocurrency #ethereum #xrp #janetyellen #thinkingcrypto #congress pic.twitter.com/emkYvIG83d
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) February 8, 2024
Senator Brown, who chairs the Senate Banking Committee, has previously called for stricter measures to prevent the use of cryptocurrencies for funding terrorism.
According to Politico, he is currently engaged in discussions regarding a bill specifically targeting the use of digital assets for money laundering.
During the hearing, Senator Mark Warner inquired about Yellen’s thoughts on his recent legislation aimed at curbing the ability of terrorist groups to exploit cryptocurrencies.
Senators Introduce Bill to Tackle Crypto Terrorism Financing
In December, Senators Warner, Mike Rounds (R-SD), Jack Reed (D-RI), and Mitt Romney (R-UT) introduced the Terrorism Financing Prevention Act.
The proposed bill expands the Treasury Department’s authority beyond a 2015 law primarily targeting Hezbollah.
The new legislation would enable the agency to identify foreign financial institutions and foreign digital asset companies that knowingly facilitate transactions for groups such as Hamas, imposing sanctions on them.
Yellen expressed support for the aims of the bill, stating:
“I would agree that there are limitations that Treasury faces, and we certainly support the aims of the bill. It would help give us authorities that would enable us to better deal with a very significant threat.”
Senator Warner responded to Yellen’s comments, saying, “I’m going to count that as an endorsement.”
The discussion highlighted the growing concern surrounding the illicit use of crypto by terrorist groups and the need for enhanced regulatory measures to counter this evolving threat.
The Treasury Department, under Yellen’s leadership, aims to strengthen its authority to effectively address the risks associated with digital assets and their potential exploitation by bad actors.
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