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The Financial Services Committee is holding a hearing on Wednesday, November 15th, to discuss “illicit activity in digital assets,” including money laundering, terrorist financing, and the role of law enforcement in crypto crime.

Witnesses include Senior Counsel and Director of Global Regulatory Matters at ConsenSys and former Associate Deputy Attorney General at the Department of Justice, Bill Hughes, former Trial Attorney and Human Trafficking Finance Specialist with the U.S. Department of Justice’s Money Laundering and Asset Recovery Section and partner at Arktouros, Jane Khodarkovsky, and co-founder & Chief Strategy Officer of Chainalysis, Jonathan Levin. 

“To ensure that the digital asset ecosystem is not exploited by bad actors, it is critical that Congress understand the degree to which illicit activity exists, what tools are available to combat this activity and explore any potential gaps to prevent and detect illicit activity,” the court memorandum reads. 

“Bad actors”


News of The Financial Services Committee hearing comes shortly after the U.S. Deputy Treasury Secretary Wally Adeyemo promised upcoming sanctions on Hamas following the militant group’s use of digital assets.

“There are places where we think Congress needs to act,” Adeyemo said. “We’re going to work with Congress to get more tools.”

The memorandum continues that “bad actors may seek to use digital wallets, mixers, and digital asset trading platforms to transact and obfuscate the movements of digital assets.” It acknowledges that the problem of money laundering in crypto often exists outside of the U.S., citing responsibility to “digital asset platforms that operate outside of the U.S. that have “substantially deficient” anti-money laundering programs.”

Similarly, the hearing will address the role of regulating bodies in the crypto space, particularly in regard to anti-money laundering and countering the financing of terrorism.

“The AML/CFT regime for the United States’ financial system is predicated on the existence of regulated intermediaries,” the memorandum states. “These intermediaries are not present in certain parts of the digital asset ecosystem.”

Regulatory framework


The Financial Services Committee hearing comes at a time when discussions surrounding the need for a crypto regulatory framework garnered national attention as a jury found FTX founder Sam Bankman-Fried, guilty in his landmark fraud trial. Previously, the Justice Department announced plans to double the size of its National Cryptocurrency Enforcement Team in order to cover the ballooning number of digital asset cases. Numerous pieces of legislation have since been introduced in an attempt to quell the situation. 

“What you have in the United States is legislative paralysis, executive overreach, and the judiciary trying to control the situation,” said Tim Enneking, Managing partner at Psalion and CEO of Presearch.com, Inc. “I don’t see that changing really anytime soon because of the split House of Representatives.”

Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets is scheduled to take place Wednesday, November 15th at 2:00 p.m. EST.


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