House Committee To Explore Crypto's Dark Side In Upcoming Hearing

The House Financial Services Committee (FSC) is set to conduct an in-depth examination of unlawful activities within the cryptocurrency sector. 

The hearing, scheduled for Nov. 15, is titled "Crypto crime in context: breaking down the illicit activity in digital assets," and aims to shed light on the darker side of the digital currency world.

This initiative by the FSC comes at a time when discussions about the future and regulation of digital assets are gaining momentum, and will be highlighted at Benzinga's Future of Digital Assets conference on Nov. 14. Such platforms are increasingly important for understanding and shaping the landscape of cryptocurrency and blockchain technology.

The House hearing will see the participation of key figures in the cryptocurrency industry. Bill Hughes, a senior counsel and director at Consensys, and Jonathan Levin, the co-founder of Chainalysis, are set to testify.

They will be joined by Jane Khodarkovsky, a former federal officer and expert in human trafficking finance.

The FSC's intention, as stated in their memorandum, is to "ensure that the digital asset ecosystem is not exploited by bad actors" by understanding the extent of illicit activities and the effectiveness of current measures to combat them.

Central to the discussions will be topics like money laundering and terrorism financing, with a particular focus on the findings of a January 2023 Chainalysis report.

Also Read: Ex-FTX Executive Pioneers New Crypto Exchange

This report highlighted a significant increase in illegal cryptocurrency transactions, coinciding with a rise in sanctions and cyber hacking incidents.

The hearing will also delve into the effectiveness of Anti-Money Laundering and Counter-Terrorist Financing protocols currently in place among cryptocurrency exchanges and decentralized finance providers.

Additionally, the roles of various regulatory bodies, including the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, and the Department of Justice (DOJ), will be scrutinized.

In a related development, the FSC's chairman, Rep. Patrick McHenry (R-NC), announced in July the introduction of new legislation aimed at providing regulatory clarity for the issuance of stablecoins for payment purposes. Concurrently, the DOJ is intensifying its efforts against cryptocurrency-related crimes by merging its Computer Crime and Intellectual Property Section with the National Cryptocurrency Enforcement Team to form a new, more robust unit focused on tackling ransomware crimes.

This move includes doubling the team's size, demonstrating the government's commitment to curbing illegal activities in the digital asset space.

Read Next: Bithumb's Ambitious Plan To Go Public A Game-Changer For The Crypto Market?

Meet and engage with transformative Digital Asset and Crypto business leaders and investors at Benzinga's exclusive event - Future of Digital Assets. Tickets are flying-  get yours!

Photo: Shutterstock