A leader at the US Secret Service is asking Congress to consider ways to prevent cryptocurrencies like Monero and Zcash from being used for illegal activities.
Deputy assistant director in the US Secret Service’s Office of Investigations Robert Novy made the recommendation on Wednesday in his prepared testimony to Congress.
“It is critical that the United States continues to work internationally to improve controls related to digital currency through organizations like the Financial Action Task Force. We should also consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies, services intended to obscure transactions on blockchains (i.e. cryptocurrency tumblers or mixers) and cryptocurrency mining pools.”
The Secret Service’s Office of Investigations has always been primarily involved in financial crimes, as their original purpose in creation was to prevent counterfeiting. Consequently, it only makes sense that the organization would place a spotlight on the cryptocurrencies that provide ample security in anonymity to their users. These currencies are used in the trade of counterfeit money on massive exchanges on the dark net markets.
“These new anonymity-enhanced cryptocurrencies are clearly ripe for illicit use in an effort to subvert legitimate law enforcement inquiries. Although it is more difficult to trace the movement of illicit proceeds using these newer anonymity-enhanced cryptocurrencies, it is not impossible.”
According to Forbes, associate director of FinCEN’s enforcement division Thomas Ott also spoke at the hearing, and pointed out that the financing of most illegal activity is not connected to cryptocurrency. Ott said,
“While traditional financial methods remain the primary vehicle for most illicit activity, FinCEN believes virtual currency presents specific illicit finance risks, and that without vigilance and action, the scale of this activity could grow,”