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US House Representative Passes New Bill Targeting Cryptocurrency-Related Illicit Finance
The U.S. House of Representatives has approved a new cryptocurrency bill aimed at limiting its use for illegal financial purposes.
Introduced by Rep. Zach Nunn (R-Iowa) on Monday, July 22, legislation aims to establish a government task force to assess the use of cryptocurrency in terrorism and money laundering activities.
This bipartisan effort aims to strengthen public-private collaboration in combating illicit finance in the digital asset sector.
As cryptocurrencies become an increasingly popular means of payment, Rep. Nunn stressed the need to provide Americans with secure access while protecting them from security risks and illicit financial activity.
“This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while protecting consumer choice for all Americans,” said Representative Nunn.
He also stressed the importance of addressing these challenges collectively to “ensure the long-term integrity of digital assets.”
The bill also mirrors broader, industry-friendly initiatives already seen in the House, such as the Financial Innovation and Technology for the 21st Century (FIT21) Act.
However, the Senate has yet to show the same enthusiasm for crypto-related legislation.
In a speech In the House of Representatives, Nunn described the legislation as “critical to strengthening America’s national security” and vital to “protecting [the nation’s] “We are committed to developing digital assets and ensuring that the next generation of financial and internet technologies is built right here in America.”
The proposed task force, which would operate under the Treasury Department, aims to include experts from a variety of industries, including blockchain intelligence agencies, research institutions and financial technology companies.
Their goal would be to explore cryptographic transactions and strategies to deter their exploitation by malicious actors.
The bill is a response to crypto critics who have been calling for tougher money laundering measures, according to Jaret Seiberg, an analyst at TD Cowen. He suggests the legislation provides political leverage to counter criticism of the cryptocurrency industry.
Furthermore, the introduction of the bill coincides with proactive action Industry’s efforts to secure Vice President Kamala Harris’ supportespecially after President Joe Biden announced his non-participation in the 2024 presidential race.
In early April 2023, the U.S. Treasury Department highlighted in a reporting vulnerabilities in decentralized finance (defi) which criminals exploit to move and launder illicit funds.
These include the failure of many cryptocurrency services to comply with anti-money laundering and counter-terrorism financing regulations, as well as weak cybersecurity measures in some services and insufficient regulatory frameworks in some jurisdictions.
October reports also indicated that Cryptocurrency may have facilitated financing for the Hamas attack on Israel, illustrating how such transactions can bypass conventional banking systems.