The United States House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion gained insights into blockchain technology during a hearing titled “Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets” on November 15.
The bipartisan nature of the hearing was emphasized by Chair French Hill at the outset.
Chair Hill initiated the meeting by referencing an article published by The Wall Street Journal on October 10, which highlighted the use of cryptocurrencies by Hamas for fundraising.
It’s worth noting that the article was corrected on October 27 to provide a more accurate representation of data from blockchain analytics firm Elliptic, as Hill pointed out.
He underscored that just as phones and the internet cannot be blamed for terror financing, cryptocurrencies shouldn’t be either.
Subcommittee ranking member Stephen Lynch expressed hope that preconceived notions about cryptocurrencies could be set aside.
The panel of witnesses included representatives from Consensys and Chainalysis, as well as forensic experts and a senior counsel from law firm Hogan Lovells.
They emphasized the importance of international and public-private collaboration to combat the misuse of digital assets, the necessity of well-crafted legislation, and the complexities of blockchain investigation.
Representative Brad Sherman posed a question to Dynamic Securities Analytics president Alison Jimenez, asking for an example of a legitimate use of a crypto mixer, to which she was unable to provide a satisfactory response.
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Additionally, a group of lawmakers, including Hill, Representative Tom Emmer, Financial Services Committee Chair Patrick McHenry, and Representative Ritchie Torres, along with 53 more House members, sent a letter to U.S. President Joe Biden and Treasury Secretary Janet Yellen on November 15.
This letter sought information on the fundraising activities of Hamas and Palestinian Islamic Jihad and their involvement with cryptocurrency.
The letter emphasized the need to understand the scale of these organizations’ digital asset fundraising campaigns in relation to their traditional funding methods.
The same Wall Street Journal article was cited in this letter. On November 12, the WSJ published a second article by the same authors on the use of cryptocurrencies to funnel money to Hamas.
On the same day, the Blockchain Association released an open letter addressed to Hill and other members of the Financial Services Committee.
This letter, signed by 40 former members of the U.S. military, intelligence officers, and national security professionals with ties to digital asset companies or venture capital, expressed concerns about the accuracy of the previously mentioned WSJ article.
They argued that this article, which they deemed “grossly overstated” and “debunked,” is being used to advocate for legislation that may not align with U.S. national security interests.
The letter emphasized that promoting the growth of a regulated and compliant digital asset industry in the United States is the most effective approach to combating illicit activities involving cryptocurrencies.
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