US Treasury Secretary Criticises Crypto For Their Use For Illicit Purposes

By Rishma Banerjee

US Treasury Secretary Steven Mnuchin said that the authority would have to be proactive about preventing Bitcoin (BTC) from becoming an “equivalent of Swiss-numbered bank accounts.” As was reported by CNBC, in a press briefing on July 18, Mnuchin criticised Bitcoin and other cryptocurrencies as they can be used for illicit purposes such as money laundering, adding that the department intends to enforce strong regulations on the space.

The official emphasised his own intent to closely monitor Bitcoin to prevent illegal activity regardless of its price, claiming that there are billions of dollars in Bitcoin and other cryptocurrencies for nefarious activities.

As Mnuchin clearly mentioned that Bitcoin’s vulnerability to money laundering is one of the main reason for the Treasury to regulate it tightly, CNBC’s host Joe Kernen questioned his point in an interview on “Squawk Box” on July 18. Kernen argued that the fact that Bitcoin and other existing currencies’ could be used for nefarious activities could not be a good enough reason for banning them, as fiat cash is also laundered all the time. Mnuchin did not back off from his position, replying that such a statement is not accurate.

The Secretary elaborated that the U.S. has the strongest anti-money laundering (AML) system in the world, adding that the government combats “bad actors in the U.S. dollar every day to protect the U.S. financial system.”

Following the interview, Kernen expressed sarcasm about Mnuchin’s idea that cash has not been laundered all the time, but the authorities are combating illicit activities in its system. He tweeted:

“‘the existing system has never been used for illicit activities but we’re going to make sure crypto is isn’t used for illicit activities like the current system.’ Got it.”

On July 15, Mnuchin expressed concern over Facebook’s proposed cryptocurrency and its potential illicit use, noting that he is not comfortable with Libra cryptocurrency, which can be used for tax evasion, extortion, illegal drugs and human trafficking, among others.