Bitcoin, Crypto currency, Blockchain

The US Congress is discussing about Bitcoin, Privacy Coins, and money laundering

fffb94e2f076112e676809e164dbe2cd - The US Congress is discussing about Bitcoin, Privacy Coins, and money laundering

The U.S. Subcommittee on crime and terrorism yesterday held a congressional hearing entitled, “protecting our elections: a study of Offshore-companies and Krypotwährungen as a way for foreign interference” under the leadership of Senator Lindsey Graham.

Scott Dueweke of the dark tower, Sheila Krumholz from the Center for Responsive Politics and David Murray, the Financial Integrity Network, participated as a witness at the hearing. Senator Sheldon Whitehouse, who introduced the “Shell Company Abuse Act” to protect US elections from foreign influence, referred to Privacy Coins, and Bitcoin during the hearing as a potential threat to the financing of election rigging and the use of influence by foreigners.

Privacy Coins, like Monero allow it to obscure their identity completely. Dueweke said that many of the Facebook Ads that were placed by Russian activists to influence the presidential elections in the United States, were paid by the Russian, centralised virtual currency platform Qiwi.

Other interesting statements in the more than hour-long consultation, we have summarised the following (freely translated):

“In terms of crypto currencies to the growing number and liquidity of Privacy Coins are the biggest risk, in order to let foreign money into the coffers of political candidates fließemn or to use for the financing of the influence of groups. These are crypto-currencies, trying to avoid the identification of their users through the Blockchain. They are used by Criminals. “

“Thousands of them all over the world – connected to each other – do not meet the requirements of KYC (Know Your Customer). [..] It is almost impossible to follow them through this Matrix of exchanges.“

On the question of how Bitcoin could be used for money laundering, replied Dueweke:

“There is a world-wide “Offshore Game”, which is currently being played. This is tailor-made for laundering money. You have nodes all over the world, many of which are completely anonymous. You don’t ask questions. […] Exchange is a Form of virtual currency for another. […] And in between there are several levels that have different currencies, Crypto, which are impossible to track.“

From the statements, it is clear that crypto-currencies offer a particularly high degree of privacy, the US Congress is a thorn in the eye, as this could be to hide the identity of the user and, therefore, for illegal financial activities. Already a few days ago, the U.S. Secret Service had issued a recommendation Privacy Coins, like Monero, and ZCash to more strongly regulate.

In the past, some exchanges had responded, e.g., Coincheck, under pressure from the Japanese government, and ZCash, Monero and Dash. A study at the beginning of February, however, has shown that Litecoin to Bitcoin, the most widely used crypto-currency in the Darknet.

At the same time were heard during the hearing of voices, the languages of the vast Potential of crypto-currencies. Crypto is not the cause of criminal activities, but the shadow financial system currencies are as follows:

“The approach can not only be limited to Bitcoin and other crypto-currencies, because there is a shadow financial system beyond our control well and each country. […] We need to take strong steps to understand the risks, to control and to counteract them, and at the same time, the growth of functional new, constitutionally of virtual currency systems promote. The world is changing and we must change with it. Identity is the key.“

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