Summary
U.S. Rep. French Hill called out lawmakers for exaggerating claims that cryptocurrency funds terrorism during a House Financial Services Committee hearing. Hill emphasized the need for proper oversight of the cryptocurrency industry, highlighting the transparency of public blockchains as a tool for law enforcement. Caroline Hill, from stablecoin platform Circle, stated that terrorist organizations are increasingly using stablecoins for donations, and called for regulatory obligations for stablecoins. Grant Rabenn, from Coinbase, pointed out the concentration of illicit actors on offshore platforms and the need for wider adoption of legal tools to police them. He also warned against overregulation of the industry, noting that public blockchains provide more visibility into transactions. Michael Mosier, former director of FinCEN, praised the transparency of blockchain and called for increased funding for regulatory bodies to tackle illicit activity. Rep. Maxine Waters blamed Republicans for cutting funding for law enforcement agencies, putting national security at risk. Rep. Ted Budd warned against judging emerging technologies by their worst uses.
Key Points
1. U.S. Rep. French Hill criticized fellow lawmakers for exaggerating the role of cryptocurrency in funding international terrorism during a House Financial Services Committee hearing. He emphasized the importance of identifying and closing potential gaps that can be exploited by criminals and terrorists, while also highlighting the potential benefits of blockchain technology in providing critical data for law enforcement.
2. Caroline Hill, Senior Director of Global Policy and Regulatory Strategy at stablecoin platform Circle, highlighted that terrorist organizations are increasingly using stablecoins to solicit donations. She called for U.S. dollar-pegged stablecoins to have the same regulatory obligations under OFAC and FinCEN to prevent their use by terrorist financing groups.
3. Grant Rabenn, director of financial crimes at cryptocurrency exchange Coinbase, pointed out the concentration of illicit actors and organizations beyond U.S. borders. He urged the wider adoption of existing legal tools to police offshore actors and prevent sanctions evasion, terrorist financing, and criminal activity. Rabenn also emphasized the transparency of public blockchains, which allows for greater visibility into transactions and compliance efforts.