Republicans and Democrats in the Senate Banking Committee are putting preparations in top gear to introduce a bill that would mandate the Government Accountability Office (GAO) to critically study the role of bitcoin (BTC) and other cryptocurrencies in illicit activities such as human and drug trafficking, money laundering, terrorist financing as well as other online activities, according to reports on July 1, 2020.
No Room for Illegal Use of Cryptos
While distributed ledger technology (DLT), bitcoin, and other cryptocurrencies are fast gaining use cases in various sectors of the global economy, the fact still remains that bad actors are taking advantage of the innovative nature of these offerings to carry out illicit activities.
According to a CipherTrace report, the top 10 heavyweight banks in the U.S. have illicit crypto money services businesses (MSBs) including crypto exchanges, transmitting funds on their payment networks. And in 2019 alone, global banks paid over $6.2 billion in anti-money laundering fines.
In the latest development, U.S. Senators have stated in a draft anti-money laundering amendment dubbed the “Anti-Money Laundering Act of 2020,” that it has become quite crucial to “modernize anti-money laundering and counter-terrorist financing laws, to adapt the government and private sector response to new and emerging threats.”
The amendment also seeks to encourage technological innovation as well as the adoption of new technologies by financial institutions, to enable them to wage war against money laundering and terrorist financing activities more effectively.
The amendment further read:
“While the use and trading of digital currencies are legitimate practices, some terrorists and criminal networks are always looking to exploit vulnerabilities” present in these systems.”
If all goes as planned and the amendment gets the approval of the authorities, the GAO will be mandated to present a comprehensive report on how Bitcoin and other virtual currencies might be playing a part in human and drug trafficking networks across online marketplaces.
What’s more, the GAO will also be required to study how these digital currencies help bad actors bring their ill-gotten wealth into the U.S. banking system and what the government is doing to stop it.
The watchdog will also try to find out whether authorities can take advantage of the “immutability and traceability properties of virtual currencies” to pin down and prosecute criminals.
As reported by BTCManager earlier in April 2020, the U.S. Congress is working on a massive 32 crypto and blockchain-focused bills that would ultimately shape the future of the country’s crypto space.