The duo of Brian Nelson and Elizabeth Rosenberg, both nominated for the US Treasury Department positions, have pledged to enforce new anti-money laundering laws focused on cryptocurrencies enacted by Congress if their confirmation scales through.
President Joe Biden nominated Brian Nelson to be Undersecretary for Terrorism and Financial Crimes and Elizabeth Rosenberg to be assistant secretary for Terrorist Financing earlier in the year. Present for their confirmation hearing with the Senate Banking Committee, both nominees had the opportunity to share their views on several issues wading into financial crimes and the role crypto plays in such events.
Brain Nelson admitting that the Anti Money Laundering Act of 2020 already enforces the Financial Crimes Enforcement Network (FinCEN) while applying new crypto-related regulations, said:
"Obviously this is an issue that was [and] has been a great concern for some time now, and it’s reflected in the new Anti-Money Laundering Act that this committee really championed[...] I would prioritize implementing pieces of that legislation including new regulations around cryptocurrency.”
Nelson also stated that the Treasury Department would have to collaborate with its international partners to help address crypto crimes, an example of which is ransomware which has been on the rise since the beginning of 2021.
Elizabeth Rosenberg reiterated Nelson’s position on Treasury Department’s international collaboration with partners to help tackle crimes perpetrated using cryptocurrencies.
“Without that kind of collaboration and … regulatory framework, it’s all too easy for criminals to avoid the U.S. jurisdiction and conduct their illegitimate activity from another jurisdiction,” Rosenberg stated, saying he would “seek to ensure” that kind of international collaboration.
It is not surprising that the nominees share these negative crypto crime sentiments as their superior Janet Yellen, Secretary of the Treasury Department repeatedly called out the cryptosystem as a willing tool for financial and cybercriminals. Janet Yellen echoed these sentiments during her confirmation hearing earlier in the year.
Although Joe Biden’s Treasury officials halted Trump administration and Steve Mnuchin’s regulations targeting non-custodial crypto wallet transactions which many crypto enthusiasts considered to be anti-innovation, Biden’s administration have not all been openly welcoming to the continued growth of cryptocurrencies. For instance, the new OCC chair has confirmed his department is looking into a possible review of the earlier green light given to licensed financial institutions to provide custody solutions for crypto entities with their stablecoin reserves. For Brian Nelson, moves like that would ensure open arms welcoming crypto activities that does not undermine US economic activities.
“It reflects a balancing of regulating to prevent virtual currency and other types of new technology from undermining our AML system while also being respectful of the fact that we need to support responsible innovation and preserve that here in the U.S. and not see that leave the country,” Nelson said.
Earlier in May, the Treasury Department issued a directive to financial institutions and US-domiciled cryptocurrency exchanges to report transactions ranging above $10,000 to the IRS for tax purposes stating that virtual currencies and cash act as avenues to hide income from the government.