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US House Financial Services Committee

Crypto Crackdown: U.S. Rep Casten Unleashes Bold Plan to Tackle Terror Financing

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In light of reports that Hamas, a Palestinian militant group, raised millions of dollars through crypto to fund attacks in Israel, U.S. Representative Sean Casten, a Democrat from Illinois, intends to introduce legislation to strengthen Bank Secrecy Act (BSA) requirements for digital asset transactions.

Casten made this announcement during a hearing before the House Financial Services Committee’s panel on illicit finance and national security. He revealed that the proposed legislation would closely resemble a bill introduced by Senator Elizabeth Warren of Massachusetts. While Casten did not specify the exact bill, Senator Warren reintroduced legislation in July that seeks to curb the misuse of cryptocurrencies for money laundering and sanctions evasion. It also extends BSA requirements to encompass digital asset wallet providers, miners, and other key participants in the crypto ecosystem.

The recent revelations regarding the use of digital assets by terrorist organizations have raised concerns over the security implications of digital assets. A Wall Street Journal report shed light on the fact that Hamas, along with other militant groups, had successfully raised significant funds through digital assets before carrying out attacks in Israel. However, digital asset researcher Elliptic has since pointed out that the scale of these fundraising efforts may have been exaggerated.

Elliptic clarified that the traceability of virtual assets made it possible to track and freeze most of the raised funds. In fact, following the attacks in Israel on October 7, only $21,000 in new crypto donations were reported, with a substantial portion of these funds already frozen. It appears that the unique transparency of digital assets has limited their utility for terrorist financing compared to traditional funding sources.

Maxine Waters’ Crypto Queries at the Hearing

The concern over cryptocurrencies’ role in facilitating illicit activities is not limited to Casten and Warren. Former House Financial Services Committee Chair Maxine Waters also raised questions about the connection between cryptocurrency, Iran, and Hamas during the hearing.

It’s essential to strike a balance in addressing these concerns. While cryptocurrencies hold the potential to democratize finance, stimulate economic growth, and foster financial inclusion, they also present security challenges. The proposed legislation aims to strike that balance by strengthening regulations and oversight without stifling the innovative potential of cryptocurrencies.

In conclusion, as the use of cryptocurrency in illicit activities gains attention, the introduction of legislation to enhance BSA requirements for digital assets becomes a critical step in safeguarding financial systems and national security. It is a response to the evolving landscape of finance, where innovation and security must coexist in harmony.

US Fed Chair Gives Juicy Comments on ‘FedCoin’ and Future of Cryptocurrency

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The United States has made no efforts to hide the fact that it considered China its biggest rival in the financial world. China’s focus on the cryptocurrency field has also riled American officials and the Federal Reserve chair has been feeling the brunt because of it. 

In a sit down with the House Financial Services Committee, Jerome Powell was asked multiple questions of the state of the US economy as well as China’s plans with the cryptocurrency industry.

Jerome Powell was in charge of submitting his monetary policy report in front of the US House Financial Services Committee. Powell was then made to answer multiple questions from Congress where Representative Bill Foster took all his time to enquire about cryptocurrencies.

Foster questioned Jerome Powell about the potential for a central bank digital currency and how it can impact the suffering economy. The Fed chair was honest in stating that the dollar was holding fine especially when compared to the failing currencies of other currencies. To this Powell replied:

“Having a single government currency at the heart of the financial system is something that has served us well. It’s a very, very basic thing, it really hasn’t been in question, and I think before we move away from that, we should really understand what we’re doing. Preserving the centrality of a central, widely accepted currency that is accepted and trusted is an enormously important thing.”

Jerome Powell claimed that there was a risk involved in central banks taking up the responsibility of crypto and blockchain. The Fedcoin plan was first proposed to combat the idea of privately owned cryptocurrencies. During the Congress meet, Powell acknowledged that banks around the world were looking into CBDCs.

The Fed chair admitted that it was the responsibility of central banks to learn about the costs and benefits associated with a possible digital currency. This was also a segue into Powell’s comments about China’s fore into cryptocurrencies. The Federal Reserve chair stated that China was developing crypto in a completely different institutional context.

Jerome Powell added that China’s position on cryptocurrencies was very different from Bitcoin. China wants to create crypto that is governed by the centre but admitted that Bitcoin functioned on a free and decentralized model. According to Powell, the US just needs to watch over its shoulder for China while creating a solid regulatory ecosystem for cryptocurrencies.