Treasury says cash is still the primary tool used for money laundering
Treasury officials noted that fiat currencies remain the primary tool for money laundering, and terrorists still use “tried-and-true methods”
Treasury Secretary Janet Yellen | Alexandros Michailidis/Shutterstock modified by Blockworks
Although illicit actors are increasingly turning to cryptocurrencies to launder money and finance their operations, cold hard cash is still their preferred tool, the US Treasury Department said in a series of reports released Wednesday.
In its 2024 National Risks Assessments, Treasury officials noted that while fiat currencies remain the primary tool for money laundering and terrorists still use “still utilize tried-and-true methods” like banks and money transmitters, digital assets are becoming a greater threat.
Fraud, most commonly through investment schemes and healthcare fraud, continues to be the number one driver of money laundering activity, officials said in the 2024 National Money Laundering Risk Assessment.
“New types of fraud involving the use of technology, such as telemedicine and virtual asset investment scams” have been on the rise this year, the report noted.
The 2024 National Terrorist Financing Risk Assessment noted that more groups, including ISIS and Hamas are increasingly using virtual assets for funding, a topic lawmakers have become increasingly concerned about in recent months.
Read more: ‘No evidence’ Hamas raised millions in crypto, Elliptic says
“Consistent with the 2022 risk assessment, the most common financial connections between individuals in the United States and foreign terrorist groups entail individuals directly soliciting funds for or attempting to send funds to foreign terrorist groups utilizing cash, registered money services businesses, or in some cases, virtual assets,” the report noted.
The House Financial Services Committee hosting a hearing in November to discuss crypto’s role in illicit finance, with witnesses including Jonathan Levin, co-founder and chief strategy officer at Chainalysis, and Jane Khodarkovsky, partner at Arktouros and former federal prosecutor, asking lawmakers to consider protecting privacy concerns and the transparent nature of the blockchain.
Fifty-seven members of Congress also penned a bipartisan letter to President Joe Biden and Treasury Secretary Janet Yellen last year asking for more information on how Hamas is funded and the role of crypto in financing their operations.
Read more: Lawmakers butt heads on role of crypto in terrorist financing
The Treasury will release its annual strategy for combating illicit finance in the coming weeks, which will include “recommendations for addressing the highlighted issues,” the department said Wednesday.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
