US Lawmakers Urge Action Against Bitcoin Unlicensed Exchanges

US lawmakers were urged to take action against unlicensed offshore bitcoin exchanges, following a subcommittee hearing within the House of Representatives. The hearing, “Virtual Currency: Financial Innovation and National Security Implications”, is being hosted by the Terrorism and Illicit Finance Subcommittee.

The growing proliferation of ransomware attacks using cryptography technology has led US lawmakers to focus again on potential negative use cases of blockchain technology. Representatives were told that bitcoin and other cryptocurrencies being increasingly used to fuel illicit activities are easily accessible via unregulated cryptocurrencies hosted outside of the United States. An emphasis was placed upon unlicensed exchanges being used as a vehicle for money laundering, terrorism, and cybercrime.

The absence of KYC guidelines and identity verification in many exchanges was highlighted as a major problem. “Criminals can open anonymous accounts, or accounts with phony names to fly under the radar of law enforcement,” said Kathryn Haun, a former US Assistant Attorney General. And current lecturer at Stanford University. The US House Financial Services Committee hearing has taken place just months after the FBI was granted legal jurisdiction to hack any computer in the world that is deemed to be connected via a ‘network’ to a computer for which the FBI has a warrant authorization infiltration. This prompts some to interpret the rhetoric as a possible pre-meditated justification for considering using said jurisdiction to clamp down on unregulated bitcoin transactions internationally. “We must find a way to target these criminal currency exchanges, often sheltered in countries where officials protect and even profit from them”, said Scott Dueweke, president of The Identity and Payments Association.

Democratic Representative Ed Permutter of Colorado recognized the widespread use of cash and money transmitting services as also being vehicles for illicit activities, but argued that law enforcement possesses the regulatory means to prosecute and punish those who use such to break the law.

Many of the issues raised have little evidence to support the need to focus more on crimes committed with cryptocurrencies than on crimes committed with dollars. There is scant evidence that more than $1,000 has been donated to terrorist groups using bitcoin, and the anonymizing capabilities of the technology are often overstated. It is also worth noting that many hackers and scammers have had their funds seized by exchanges when attempting to convert their cryptocurrency into fiat (including the shadowy and anonymously operated BTC-E) – suggesting that the cryptocurrency network possesses some internal means to alienate and punish those who seek to use bitcoin for clandestine purposes.


Disclaimer: This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest. The opinions expressed in this article are those of the author, they do not necessarily represent infocoin views and should not be attributed to Infocoin.

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