Cryptocurrency a 'very critical issue': Banking panel chair
WASHINGTON — As senators weigh reforms of anti-money-laundering rules, they reiterated their desire Wednesday to include issues related to cryptocurrencies as part of legislative discussions.
Bitcoin and other virtual currencies were a mere afterthought last week at the first of two Senate Banking Committee hearings on AML policy, but cryptocurrencies came into clearer focus in the second hearing Wednesday.
"It is a very critical issue and I think it is one we will pay a lot of attention to as we try to draft legislation,” said Banking Committee Chairman Mike Crapo, R-Idaho, in a brief interview.
Sen. Mark Warner, D-Va., drew attention at last week's hearing when he said the market is "about to be overwhelmed by bitcoin [and] other kinds of cryptocurrencies."
On Wednesday, Warner, who is vice chairman of the Senate Select Committee on Intelligence, said volatile price fluctuations in cryptocurrencies may be cause for concern. He noted that the price of bitcoin has plummeted in recent days after China said it would take a closer look at virtual-currency regulation.
"We still have a lot of work to do on cryptocurrencies to get ahead of this,” Warner said at the hearing Wednesday.
Sigal Mandelker, Treasury’s under secretary for terrorism and financial crimes, testified at the hearing that money laundering related to cryptocurrencies is “an area of high focus” for Treasury.
M. Kendall Day, acting deputy assistant attorney general at the Department of Justice, said the department recently hired a digital currency lawyer whose job it was to make sure prosecutors are up-to-date on the latest money-laundering threats in the digital currency field.
Mandelker, meanwhile, sought to assure the senators that the Financial Crimes Enforcement Network has the resources it needs to rein in criminals who use virtual currencies to launder money. The U.S. “gets a lot of [suspicious activity reporting] from virtual currency exchangers," but it is imperative that other countries adopt standards similar to the U.S., Japan and Australia, she said.
Treasury Secretary Steven Mnuchin also announced last week that U.S. regulators and Treasury were forming an interagency working group focused on virtual currencies.
“Cryptocurrencies ... provide anonymity and are lightly regulated,” said Sen. Joe Donnelly, D-Ind. He asked Day and Mandelker how often they see criminals use virtual currencies to launder money.
“We have seen criminal groups focus on digital currencies; there have been a number of prosecutions,” Day said, without putting a specific figure on it.