To strengthen the battle against crimes using cryptocurrencies, Senators Charles Grassley of Iowa and Catherine Cortez Masto of Nevada have introduced a new bill that would give the Secret Service more jurisdiction.
The “Combatting Money Laundering in Cyber Crime Act of 2024” bill seeks to provide the Secret Service more authority to investigate suspected frauds against US financial institutions and cryptocurrency transactions carried out by unlicensed money transmitters.
According to Senator Cortez Masto,
“The funding of criminal activity through digital assets poses a direct threat to the security and safety of our nation.
My new bill with @ChuckGrassley gives the Secret Service the tools to investigate criminal organizations using digital assets to evade the law.The Secret Service plays a critical role in combatting financial crime, and our bill will ensure they can continue to keep us safe.
— Senator Cortez Masto (@SenCortezMasto) August 4, 2024
Sen. Masto has emphasized the obvious and immediate threat that using digital assets to finance illicit operations poses to the country’s security. The bill requires the creation of a Government Accountability Report (GAR) that assesses the efficiency of law enforcement in identifying and discouraging money laundering within a year.
Improving The Secret Service’s Capabilities
The introduction of this measure is the result of the new paths that cryptocurrencies provide. Sen. Grassley emphasized the need for improved threat assessments in order to effectively prosecute “seedy financial companies” that support money laundering and other criminal conduct.
Since 2004, the Secret Service’s Cyber Investigative Section has functioned as an internal division dedicated to thwarting cybercrime. In 2020, the agency announced the creation of its Cyber Fraud Task Forces, combining its Electronic Crimes Task Forces and Financial Crimes Task Forces to improve collaboration and expertise in investigating financially motivated cybercrime.
According to recent data from blockchain forensics company Chainalysis, illegal addresses laundered $22.2 billion of cryptocurrencies in 2023. Although this amount is significant, it represents a sharp decrease of over 30% from the $31.5 billion total from the year before.
Notwithstanding these results, the US Treasury has emphasized that conventional cash transactions—rather than cryptocurrency transactions—remain the major channel by which criminals in the country launder money. Nonetheless, governmental organizations, including the US Treasury, Department of Justice, SEC, and CFTC, have been fighting crypto criminals head-on in recent years.
Bipartisan Support
A recent security breach that permitted an attempt on the life of a political candidate has brought the Secret Service, well-known for its role in protecting prominent politicians and looking into financial crimes, under closer scrutiny. Concurrently, the Financial Technology Protection Act was just adopted by the US House; it aims to protect consumer rights while preventing illegal cryptocurrency activities.
This support from both major parties highlights the urgent need for new guidelines to address the risks associated with the rapidly expanding digital currency market. Masto is trying to address cryptocurrency and money laundering for the second time in a year with her new legislation.
She filed a bill in September of last year to guarantee that cryptocurrency businesses abide by government regulations related to anti-money laundering and counterterrorism funding. Nine lawmakers introduced a measure similar to the CMLC2024 in January.
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