The challenges that law enforcement agencies face in addressing the illicit funding potential of virtual currencies was explored at a hearing held by the House Subcommittee on Terrorism and Illicit Finance this week.
While the majority of virtual currency transactions are legitimate, there is the potential for illicit activity. The anonymity, ease of transacting across any distance, and speed of resolution at low cost make virtual currencies attractive to criminals and terrorists.
Specifically, law enforcement has seen an increase in criminal and terrorist exploitation of virtual currencies to raise funds and launder money.
“Today’s hearing was an excellent opportunity to learn more about the illicit use of virtual currencies and what we can do to combat the abuse of virtual currencies on Dark Web marketplaces for criminal and terrorist activity,” Subcommittee Chairman Rep. Steve Pearce (R-NM) said. “I greatly enjoyed hearing from our expert witnesses today on potential solutions and look forward to continuing work with my colleagues to reinforce our law enforcement’s ability to detect bad actors.”
Gregory Nevano, deputy assistant director of Illicit Trade, Travel, and Finance Division at Homeland Security Investigations, said law enforcement agencies must continue to adapt as technologies evolve.
“We will continue to use our unique and powerful combination of law enforcement authorities and access to information to close vulnerabilities that can be exploited to harm our homeland in the real and virtual worlds,” Nevano said.
Robert Novy, deputy assistant director of the Office of Investigations, U.S. Secret Service, said criminals that use of digital currencies should have no illusions that they are beyond the reach of the law.
“Fundamentally, we must maintain the integrity and accessibility of the global financial system and protect it from abuse,” Thomas Ott, associate director of Enforcement Division at the Financial Crimes Enforcement Network, said. “As we continue to see technology evolve and integrate into the U.S. and global financial system, we must ensure that it does so in a way that allows for the transparency needed to protect the financial system.”