Incoming US secretary of the treasury Janet Yellen may not be a big fan of cryptocurrencies at least according to her nomination hearing on Tuesday January 19. Yellen was asked cryptocurrencies as Joe Biden’s pick for the treasury hot seat and her response was not flattering at all.
Haven for terrorist activity
While answering a question by democrat senator Maggie Hassan on the” importance of treasury programs to combat the financing of terrorists and criminal organizations.” Yellen said that she had raised the issue in previous hearings with outgoing treasury secretary Steven Mnuchin. She referenced “The bipartisan National Defense Authorization Act passed earlier this month and it included a provision led by Senator Warner that established an advisory group with Treasury to counter new ways that terrorists use emerging financial technology,” she went on to say that “One area of growing concern, for example, is the potential for terrorists and criminals to use cryptocurrency to finance their activities.”
While elaborating on how treasury should combat new forms of terrorist and crime financing, she singled out cryptos as a particular concern. “Cryptocurrencies are a particular concern. I think many are used, at least in a 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 (sic) doesn’t occur through those channels”.
Bicoiners react
Yellen’s remarks led to a barrage of comments from crypto enthusiasts one of them being NFL pro-athlete Russell Okung. The athlete who recently became the first to be paid in BTC said; “Treasury Sec nominee Yellen says bitcoin is a concern for terrorist financing, money laundering … as if the USD isn’t. Don’t be distracted. The things of old are passing away, fight for your future.”
Okung’s testament was followed by Kraken’s Dan Held who pointed out that only 0.3% of crypto activity in 2020 had been illicit compared to 90% of US dollars having cocaine on them. Morgan Creek’s Anthony Pompliano echoed Dan’s comment by saying that the US dollar was the currency of choice for most criminals in the world.
Yellen’s words are cause for concern because she is not the only powerful person in a regulatory position (soon to be) that has spoken of Bitcoin as an enabler of illicit trade. Last week saw the head of the European Central Bank say that “Bitcoin has conducted some funny business and some interesting and reprehensible money laundering activity.”
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