The cryptocurrency sector will likely face a hostile environment in the U.S. after the Treasury Secretary nominee placed them under the spotlight for the wrong reasons.
Testifying at Confirmation hearings, U.S. Treasury nominee Jenet Yellen ripped through cryptocurrencies, calling them out as “a particular concern” that needs to be addressed.
“I think many [cryptocurrencies] are used, at least in transactions sense, mainly for illicit financing,” said Yellen.
The 74-year-old economist who served as the 15th chair of the Federal Reserve under the Obama administration from 2014 to 2018, added that cryptocurrencies are used in illicit financing.
Yellen explained that various ways are needed to stem the use of digital assets in criminal activities such as money laundering.
“And I really think we need to examine ways which we can curtail their [cryptocurrencies] use and make sure that anti-money laundering doesn’t occur through those channels,” she said.
— Documenting Bitcoin 📄 (@DocumentBitcoin) January 19, 2021
During her stint as the chair of the Fed, she said she didn’t want to overregulate crypto and in December 2017, she explained that the Fed has no regulatory oversight of bitcoin.
“The Fed doesn’t really play any role, any regulatory role with respect to bitcoin other than assuring that banking organizations that we do supervise are attentive that they’re appropriately managing any interactions they have with participants in that market, and appropriately monitoring anti-money laundering [and] Bank Secrecy Act responsibilities that they have,” she said back then.
Crypto community not pleased with Yellen’s remarks
If she is confirmed as the Treasury Secretary, Yellen will oversee a number of proposed crypto regulations through the Financial Crimes Enforcement Network (FinCEN).
She will oversee the controversial rule that requires exchanges to collect and store identifying information for users who withdraw their funds to self-hosted wallets.
A number of crypto enthusiasts lashed out at the outgoing U.S. Treasury Steven Mnuchin for hurrying such an important and controversial rule at the twilight of his term.
There were prospects that the incoming Treasury Secretary would lean towards crypto innovation and impose less draconian regulation.
Before Ripple was hit with an enforcement action by the U.S. Securities and Exchange Commission, the firm’s CEO was optimistic that the incoming Joe Biden administration would be more open in working with the crypto community and enact rules that promote innovation.
Founder and partner at Morgan Creek Digital Assets Anthony Pompliano argued that the “U.S. dollar is the choice currency of criminals around the world.”
He went on to say that “large banks launder more money than the entire bitcoin market cap.”
Janet Yellen stated today that cryptocurrencies are concerning because of terrorist financing and money laundering.
She forgot to mention that the US dollar is the choice currency of criminals around the world.
The large banks launder more money than entire Bitcoin market cap.
— Pomp 🌪 (@APompliano) January 19, 2021