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Janet Yellen Believes Crypto Use in Terrorism Is “a Growing Problem”

U.S. Treasury Secretary Janet Yellen declared yesterday that crypto used for illegal activities represent “a growing problem.”

Yellen made these comments as she was speaking at a financial sector innovation policy roundtable:

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism,” she said in her opening statement.

Yellen made a reference to the Anti-Money Laundering Act, which was passed by Congress in December 2020. This was part of the National Defense Authorization Act that asks the U.S. government to update the laws regarding anti-money laundering and countering the financing of terrorism. She mentioned that the regulatory framework put in place was created all the way back in the 1970s and has been hardly updated since.

“The update couldn’t have come at a better time. As this group knows very well, we’re living amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy.”

This is already the third official statement regarding crypto made by Yellen in 2021. During her confirmation hearing in January, she said that crypto usage in terrorism was “a particular concern.” On a separate occasion, she took a more supportive role, commenting that crypto could be beneficial to the financial system.

The remarks made by Yellen come a week following the report published by the United Nations in which it was claimed that crypto was used to finance terrorist organizations such as Al-Qaeda or ISIS.

Earlier in 2021, the U.S. Department of Justice announced that it managed to dismantle three separate campaigns that were using crypto to finance Al-Qaeda, ISIS, and Hamas.

Federal law enforcement officials are also currently investigating if bitcoin was used to fund domestic terrorism following the attack of the U.S. Capitol Hill.

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