US Treasury Secretary Yellen says crypto misuse is a growing problem

Regulation

United States Treasury Secretary Janet Yellen is concerned about crypto’s supposed criminal element. 

In Feb. 10 remarks to a financial sector innovation roundtable, United States Treasury Secretary Janet Yellen stated that the misuse of cryptocurrencies and virtual assets has been a growing problem alongside cyber attacks triggered by the global pandemic.

Secretary Yellen said that despite the potential of new technologies like crypto, such assets are still associated with major risks. “I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism,” Yellen stated.

According to the official, the private sector has been making a significant contribution to the government’s efforts to combat these crypto-related crimes. “From my time at the Fed, I know the crucial role your institutions play in combating crimes like these. The private sector invests enormous resources, finding ways to stop bad actors from misusing existing technologies. You also develop new ones,” Yellen.

In the statement, Yellen also stressed the need of “equitable innovation” to help “bring the benefits of the financial system and modern IT to more people.” She said that the equitable innovation approach can be symbiotic with the Treasury Department’s existing motto of “responsible innovation.”

Despite Yellen claiming that misuse of crypto has been a “growing problem,” the amount of crypto-related crimes has apparently dropped in 2020. According to Chainalysis — one of the largest crypto intelligence firms in the U.S. — the criminal share of all crypto activity in 2020 fell to just 0.34%. In 2019, criminal activity represented over 2% of cryptocurrency transaction volumes, according to the firm.

In January 2021, the U.S. Department of Justice seized half a million dollars in crypto from major malware operator with help of Chainalysis.

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