In a congressional hearing, U.S. Treasury Secretary Janet Yellen emphasised to Senator Sherrod Brown the necessity for the Treasury Department to acquire more authority to confront the alleged utilisation of cryptocurrencies by terrorist groups. Senator Brown, an Ohio Democrat recognized for his influence in potential cryptocurrency legislation, queried Yellen during Thursday’s Senate Banking Committee hearing about the required updates for the Treasury to address this concern. While much of the hearing focused on broader economic discussions, some Democrats raised questions regarding the exploitation of cryptocurrencies by malicious actors.
“We know that terrorist groups like Hamas, Al-Qaeda, and Hezbollah have utilised digital assets to finance and transfer funds. We possess crucial tools to combat illicit financing, but most of them originated in the post-9/11 era,” Brown stated. “As terrorists continue to adapt, Madam Secretary, should we revise our counter-terrorism measures to address the risks posed by digital assets?”
Yellen acknowledged the need for additional authority within the Treasury Department. “We currently possess numerous authorities that empower us to take action, but we have identified several gaps in our capabilities and have compiled a list of recommendations for enhancing the Treasury’s authority,” Yellen explained.
Senator Brown, who leads the Senate Banking Committee, has previously advocated for measures to curb the exploitation of cryptocurrencies for terrorist financing and is engaged in discussions regarding potential legislation aimed at this issue, according to Politico.
During the hearing, Senator Mark Warner of Virginia inquired whether Yellen believed his recent legislation, intended to clamp down on the ability of terrorist groups to utilise cryptocurrencies, was necessary. In December, Senators Warner, Mike Rounds of South Dakota, Jack Reed of Rhode Island, and Mitt Romney of Utah introduced the Terrorism Financing Prevention Act, which expands the authority of the Treasury Department beyond a 2015 law primarily targeting Hezbollah. The proposed legislation would empower the agency to identify foreign financial institutions and overseas digital asset firms that knowingly facilitate transactions for Hamas and similar groups, and subsequently impose sanctions on them.
“I concur that there are constraints faced by the Treasury, and we certainly endorse the objectives of the bill,” Yellen responded. “It would provide us with the authority necessary to more effectively address a significant threat.”
“I’ll take that as an endorsement,” Senator Warner replied.