The United States House of Representatives Financial Services Committee (FSC) has scheduled a deep dive into illicit activities in the cryptocurrency ecosystem on November 15, 2023. The hearing, titled “Crypto crime in context: breaking down the illicit activity in digital assets,” will include prominent crypto entrepreneurs as attendees and witnesses. Bill Hughes, senior counsel and director of global regulatory matters at Consensys, and Jonathan Levin, co-founder and chief strategy officer at Chainalysis, have been invited to participate in the hearing as witnesses. Former federal officer and human trafficking finance specialist Jane Khodarkovsky will also join the duo as a witness.
The committee’s memorandum on the hearing emphasizes the importance of understanding the degree to which illicit activity exists in the digital asset ecosystem and exploring potential gaps to prevent and detect illicit activity. The goal is to ensure that the digital asset ecosystem is not exploited by bad actors, and the committee aims to explore the tools available to combat illicit activity.
Discussions around illicit activity, such as money laundering and terror financing, will take center stage at the hearing. The FSC cited a Chainalysis report from January 2023, which stated that illicit cryptocurrency volumes reached all-time highs amid a surge in sanctions designations and hacking. The hearing will also examine the depth of Anti-Money Laundering and Counter-Terrorist Financing measures enforced by crypto exchanges and decentralized finance providers.
In addition, the role of governing entities, including the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, and the Department of Justice (DOJ), will also be discussed at the hearing.
The DOJ has recently announced plans to double the headcount of its crypto crime team, merging its Computer Crime and Intellectual Property Section and the National Cryptocurrency Enforcement Team to form a new “super-charged” unit tasked to combat ransomware crimes. This expansion of the DOJ’s efforts to combat crypto-related crimes underscores the significance of the hearing and the broader issues at stake.
The hearing is a significant step in the ongoing dialogue about the regulation and oversight of the crypto ecosystem. It comes on the heels of efforts by Representative Patrick McHenry, the chairman of the FSC, to bring regulatory clarity for the issuance of stablecoins designed for payment. The need for regulatory clarity and the prevention of illicit activities are central themes in the current conversation surrounding the digital asset ecosystem.
The event is expected to offer insights and perspectives on how illicit activities in the cryptocurrency space are being addressed and prevented. The participation of industry experts as witnesses, along with the involvement of key government entities in the discussion, highlights the collaborative effort to tackle the challenges posed by illicit activities in the cryptocurrency ecosystem.
The hearing serves as an opportunity for stakeholders to engage in constructive dialogue and contribute to the development of effective strategies for combating illicit activities in the cryptocurrency space. By shedding light on the current state of affairs and exploring potential measures to address gaps and challenges, the hearing aims to advance the understanding of the digital asset ecosystem and promote a more secure and compliant crypto landscape.