The US House of Representatives has passed a new cryptocurrency bill designed to combat illegal finance. Introduced by Representative Zach Nunn (R-Iowa) on July 22, the legislation aims to create a government working group to evaluate cryptocurrency’s role in terrorism and money laundering.This bipartisan bill aims to enhance public-private collaboration in combating illicit finance in the digital asset space.
With cryptocurrencies becoming a more common payment method, Rep. Zach Nunn (R-Iowa) stressed the need to provide Americans with secure access while protecting them from security threats and illegal financial activities.
“This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also safeguarding consumer choice for all Americans,” said Rep. Nunn. He highlighted the importance of a unified approach to maintaining the integrity of digital assets.
The bill aligns with previous sector-friendly initiatives in the House, such as the Financial Innovation and Technology for the 21st Century Act (FIT21). However, the Senate has yet to show similar enthusiasm for crypto-related legislation.
In his House floor speech, Nunn described the bill as “crucial for strengthening America’s national security” and essential for “protecting [the nation’s] digital assets and ensuring that future financial and internet technologies are developed in America.”
The proposed working group, to be established under the Treasury Department, will include experts from blockchain intelligence, research institutions, and fintech companies.
The proposed working group’s objective is to investigate crypto transactions and develop strategies to prevent their misuse by malicious actors.
Analyst Jaret Seiberg from TD Cowen views the bill as a response to critics of the crypto industry who have demanded stricter measures against money laundering. He believes the legislation provides political leverage to address criticisms.
The bill’s introduction also aligns with the industry’s efforts to gain support from Vice President Kamala Harris, particularly following President Joe Biden’s decision not to run in the 2024 Presidential race.
In April 2023, a U.S. Department of the Treasury report highlighted vulnerabilities in decentralized finance (DeFi) that criminals exploit for moving and laundering illicit funds. Issues include non-compliance with anti-money laundering and counter-terrorism financing regulations, weak cybersecurity in some services, and inadequate regulatory frameworks in certain jurisdictions.
Reports from October also suggested that cryptocurrency might have been used to fund the Hamas attack on Israel, demonstrating how such transactions can bypass traditional banking systems.