Janet Yellen Says Cryptocurrencies Are a 'Concern' in Terrorist Financing

The U.S. should examine how it can curtail the use of crypto for illicit financing, the former Fed Chair said.

AccessTimeIconJan 19, 2021 at 6:20 p.m. UTC
Updated Sep 14, 2021 at 10:58 a.m. UTC
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Cryptocurrencies are “a particular concern” when it comes to terrorist financing, potential Treasury Secretary Janet Yellen said Tuesday.

Speaking at a Senate Finance Committee hearing on her anticipated nomination after President-elect Joe Biden takes office tomorrow, Yellen said the U.S. should be aware of emerging tools for terrorist financing.

“The technologies to accomplish this change over time and we need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern,” she said in response to a question by Sen. Maggie Hassan (D-N.H.), who called crypto use in terrorist financing a “growing concern.”

Hassan was asking about last year’s National Defense Authorization Act, which includes a provision for examining how terrorists might use new financial technologies to raise funds. Sen. Mark Warner (D-Va.) led the provision’s inclusion.

“I think many [cryptocurrencies] are used, at least in transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn't occur through those channels,” Yellen said Tuesday.

Federal authorities are currently investigating whether there is a link between a December transaction of 13.5 bitcoin by now-deceased French computer programmer Laurent Bachelier to right-wing figures and the attempted insurrection at the U.S. Capitol earlier this month. Several of the recipients of the transaction appear to have been at the Capitol on Jan. 6.

As Fed Chair, Yellen said she didn’t want to over-regulate the crypto space, though she’s also dismissed bitcoin at various points during her term and immediately after. When she takes office, she’ll oversee a number of proposed regulations through the Financial Crimes Enforcement Network, including a controversial rule that would require exchanges to collect and store counterparty information for unhosted wallets.

Sen. Ron Wyden (D-Ore.) hopes a confirmation vote will occur Thursday.

UPDATE (Jan. 19, 2021, 18:55 UTC): Updated with additional context.

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