US Treasury Secretary nominee Janet Yellen attacks cryptocurrencies

President Biden's nominee for Treasury Secretary aims to 'curtail' the use of crypto due to terrorism and money laundering concerns

Potential US Treasury Secretary Janet Yellen said cryptocurrencies are a "particular concern" of law enforcement officials tasked with controlling money laundering and other forms of illicit financing.

Yellen's comment came in response to a question from Senator Maggie Hassan during the Senate hearing on Tuesday, January 19. Hassan asked Yellen about the possibility of terrorists and other criminals using cryptocurrencies to finance their activities. She also asked about the Treasury's role in the battle against illicit financial activities.

Yellen said:

"You're absolutely right that the technologies to accomplish this change over time, and we need to make sure that our methods for dealing with these matters, with terrorist financing, change along with changing technology.

"Cryptocurrencies are a particular concern. I think many are used – at least in a transaction 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 money laundering doesn't occur through those channels."

The opinions of the former chair of the Federal Reserve follow comments by European Central Bank President Christine Lagarde, who said that Bitcoin is a “highly speculative asset which has conducted some funny business and some interesting and totally reprehensible money laundering activity.”

The UK Financial Conduct Authority (FCA) has also warned that people who invest in cryptocurrencies may "lose all of their money".

Yellen added that her first priority is to help US workers and companies that have been severely affected by the coronavirus pandemic.

Yellen also called for the necessity of achieving a fair price for the dollar in the foreign exchange market and criticised China for its monetary policy.

She said that the US Treasury will work overtime to release a second relief package after the $1.9trn stimulus round from Biden. She added that the absence of aid would exacerbate the recession caused by the Covid-19 epidemic.

No deadline has been set for the vote on Biden's choice of treasury secretary but, according to Bloomberg, a vote on Yellen is likely as early as Thursday, January 21.

 

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