The Financial Services Committee is set to hold a hearing on Wednesday, November 15th, to address the issue of illicit activity in digital assets. This includes discussions on money laundering, terrorist financing, and the role of law enforcement in combating crypto-related crimes. The hearing aims to shed light on the extent of illicit activities, available tools for prevention and detection, and any potential gaps in the current system.
Expert Witnesses
Several expert witnesses will testify at the hearing, providing valuable insights and expertise. These witnesses include:
- Bill Hughes – Senior Counsel and Director of Global Regulatory Matters at ConsenSys and former Associate Deputy Attorney General at the Department of Justice.
- Jane Khodarkovsky – Former Trial Attorney and Human Trafficking Finance Specialist with the U.S. Department of Justice’s Money Laundering and Asset Recovery Section and partner at Arktouros.
- Jonathan Levin – Co-founder & Chief Strategy Officer of Chainalysis.
“To ensure that the digital asset ecosystem is not exploited by bad actors, it is critical that Congress understand the degree to which illicit activity exists, what tools are available to combat this activity and explore any potential gaps to prevent and detect illicit activity,” the court memorandum reads.
News of the Financial Services Committee hearing comes in the wake of the U.S. Deputy Treasury Secretary Wally Adeyemo’s promise to impose sanctions on Hamas for its use of digital assets. Adeyemo emphasized the need for legislative action and collaboration with Congress to strengthen the enforcement tools available.
“There are places where we think Congress needs to act. We’re going to work with Congress to get more tools,” said Adeyemo.
The court memorandum also acknowledges that “bad actors may seek to use digital wallets, mixers, and digital asset trading platforms to transact and obfuscate the movements of digital assets.” It highlights the responsibility of digital asset platforms operating outside of the U.S. to have robust anti-money laundering programs to mitigate the problem of money laundering.
The hearing will also focus on the role of regulatory bodies in the crypto space, particularly in terms of anti-money laundering measures and countering the financing of terrorism. It recognizes that certain parts of the digital asset ecosystem lack regulated intermediaries, which undermines the existing AML/CFT regime for the United States’ financial system.
“These intermediaries are not present in certain parts of the digital asset ecosystem,” the memorandum states.
The Financial Services Committee hearing is taking place at a time when discussions around the need for a comprehensive crypto regulatory framework have gained national attention. This has been further intensified by the recent fraud trial of FTX founder Sam Bankman-Fried. As a result, the Justice Department has expressed plans to expand its National Cryptocurrency Enforcement Team to handle the increasing number of digital asset cases.
“What you have in the United States is legislative paralysis, executive overreach, and the judiciary trying to control the situation,” said Tim Enneking, Managing partner at Psalion and CEO of Presearch.com, Inc.
The hearing, titled “Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets,” is scheduled to take place on Wednesday, November 15th, at 2:00 p.m. EST.
