Janet Yellen— American economist and U.S. Treasury Secretary has described the illicit use of cryptocurrencies as “a growing problem” suggesting that policymakers are becoming more anxious about the digital currency. Yellen also warned of the growing cyber-attacks and cryptocurrency’s related crimes. On January 26, Yellen took up the U.S. Treasury Secretary post — she has served as Federal Reserve Chair before that.
“The misuse of cryptocurrencies and virtual assets is a growing problem. I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism.” Yellen told the Treasury’s financial sector innovation policy roundtable.
Cryptocurrencies market cap had reached 1.4 trillion this week. Furthermore, after Tesla (NASDAQ: Tesla) announced that they bought $1.5 billion of Bitcoin, the demand grew for the cryptocurrencies. Consequently, U.S. policymakers discussed the dangers that may arise from the growing interest and hacks.
Yellen Wants to Block Money Laundering with Cryptos
Bitcoin (BTC) the largest cryptocurrency is widely used in deep web and illegal markets. Criminals use the cryptocurrency in dirty money laundering, scamming victims, defrauding investors, and buying illicit goods. The cryptocurrencies are criminals’ favorite money because it’s untraceable — making it a hard task for law enforcement to follow its source.
Furthermore, Bitcoin price blasted above a new record high of $48,350 on Thursday. The digital currency surged over 9% in one day. The price increase followed news that BNY Mellon and Mastercard are both accepting Bitcoin.
Neil Wilson, chief market analyst at trading platform Markets.com, told Business Insider: “adoption of cryptocurrencies by big institutional investors like BNY Mellon would likely bring more regulatory oversight.”
Nevertheless, Yellen’s comments generated angry reactions from Bitcoin enthusiasts and traders. Some traders argued that the U.S. government’s comments about Bitcoin are “hypocritical”. Traders said that watchdogs should watch out for big banks instead.
“I think we really need to examine ways in which we can curtail [cryptocurrencies’] use and make sure that money laundering doesn’t occur through those channels,” Yellen added.