US launches special task force to deal with the use of crypto for illegal activities

The US is looking towards establishing a strict framework that will prevent the use of cryptocurrencies for illegal activities. The recent initiative by the Biden administration towards making this possible is the launch of a five-pillar strategy.

This strategy will be used to deal with corruption in the US and to promote national security. The strategy will involve creating a special task force that will look into crypto exchanges and how they are being used to conduct illicit activities.

Crypto exchanges under US’s radar

The five-pillar strategy will address how crypto exchanges and other firms are being used as avenues for money laundering activities.

The main objective of this task force is to enforce anti-money laundering regulations and ensure that everyone adheres to the criminal and civil laws. For proper enforcement, the federal government is planning to incorporate new tools that will be used to investigate and prosecute those failing to comply with anti-money laundering regulations.

Pillar three highlights the association of cryptocurrencies with illegal acts such as corruption and notes that “DOJ (Department of Justice) will utilize a newly established task force, the National Cryptocurrency Enforcement Team, to focus specifically on complex investigations and prosecutions of criminal misuses of cryptocurrency.”

The Biden administration has stressed that this team will specifically oversee financial crimes done through crypto exchange platforms. Moreover, the team will supervise “mixing and tumbling services and money laundering infrastructure actors.”

DOJ to obtain overseas financial records

Under this strategy, the DOJ has also received additional power to subpoena for financial records hidden overseas. Moreover, the DOJ will also have the authority to impose new disclosure requirements of the beneficial owners of the financial assets.

The DOJ is also planning to reward whistleblowers that share information that will lead to the recovery of financial assets used for illicit activities. Incentivization of whistleblowers will create more willingness by people to identify and report financial illegalities.

As the five-pillar strategy takes effect, the White House is also looking to sit down with the leading crypto companies. Maxine Waters, the Chair of the House Committee on Financial Services, has invited the CEOs of top crypto firms to discuss the future of finance.

Some of the CEOs attending the committee hearing on Wednesday include the chief financial officer of Coinbase Global, the CEOs of Bitfury, Circle, FTX, Paxos and the Stellar Development Foundation.

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