In December, the U.S. Senate Judiciary held a amount panel hearing focusing on a neb designed to modernise anti-money laundering (AML) laws, which included looking at the work that digital currencies play.
The hearing on Bill S1241: Modernizing AML Laws to Combat Money Laundering together with Terrorist Financing took place, chaired by Chuck Grassley, a senior U.S. Senator from Iowa, together with the electrical flow chairman of the Judiciary Committee of the 115th Congress.
Opening the hearing, Grassley said that the introduction of S1241 is designed to hand police enforcement the tools it requires to produce its job, stating that:
This neb volition modernize our AML laws past times providing novel tools, modernizing methods, together with closing loopholes to brand certain that police enforcement tin prevent, identify, together with prosecute those who intermission the law.
According to a study conducted past times the Tax Justice Network, the U.S. is i of the easiest places inward the basis for terrorists, human traffickers, together with corrupt unusual politicians to enshroud illicit money, said Senator Dianne Feinstein at the hearing, who is backing the bill, adding that:
The neb is intended to address a pose out of gaps inward electrical flow law. It is the production of years of travel together with it builds on the recommendations included inward a bipartisan study titled ‘The Buck Stops Here: Improving the States Anti-Money Laundering Practice.’
The hearing, which heard from 7 witnesses over 2 panels, focused on the threat that money laundering, terrorist financing, together with other forms of illicit financing pose to the national safety of the U.S. together with the integrity of the U.S. together with international fiscal systems.
Kenneth Blanco, deputy attorney full general of the criminal sectionalisation at the U.S. Department of Justice, said that equally economies together with fiscal systems dice increasingly global, thence equally good produce criminal organisations.
He said:
Transnational criminal organizations, kleptocrats, cybercriminal groups, terrorists, drug cartels, together with alien smugglers alike must detect ways to disguise the origins of the proceeds of their crimes thence that they tin work the profits without jeopardizing their source.
According to the UN Office on Drugs together with Crime, it estimates that annual illicit proceeds amount to a greater extent than than $2 trillion globally. Some of the money laundering threats that Blanco highlights include illicit cash, trade-based money laundering, illicit work of banks, prepaid access cards, together with digital currencies.
The work of cryptocurrencies enables criminals to deport illicit transactions because they offering potential anonymity, which enables them to motion their criminal proceeds betwixt countries, states Blanco. In his opinion, though, or thence countries possess got express AML controls.
As an example, he cites the Drug Enforcement Administration’s (DEA) 2017 National Drug Threat Assessment, which constitute that China-based firms manufacturing goods used inward trade-based money laundering schemes oftentimes prefer to bring payment inward bitcoin because it tin hold out used to anonymously transfer value overseas, thereby circumventing China’s working capital missive of the alphabet controls. However, many would debate that bitcoin is inward fact pseudo-anonymous.
Matthew Allen, acting assistant manager of the Homeland Security Investigative Programs together with U.S. Immigration together with Customs Enforcement, explained that inward Nov 2016 HSI particular agents investigated together with seized $1.2 1000000 inward cash from Utah resident Aaron Shamo, who led a Xanax together with fentanyl pill production organization. He together with then proceeded to sell his illicit products via the nighttime spider web where an investigation led to the identity of his digital currency wallet address. According to Allen, agents were able to seize Shamo’s bitcoins, valued at $2.5 million.
Yet, despite this, Jennifer Fowler, deputy assistant secretarial assistant for terrorist financing together with fiscal crimes at the U.S. Department of the Treasury, claims that the U.S. dollar continues to rest a pop currency for illicit commerce together with money laundering. She adds, though, that the Treasury is continually monitoring the work together with evolution of novel payment technologies, such equally digital currencies.
She said:
Although virtual currencies are used for illicit transactions, the book is pocket-size compared to the book of illicit activity through traditional fiscal services.
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