Home News Bitcoin US Secret Service Official Recommends Coming Heavily Down on Privacy-Oriented Cryptocurrencies

US Secret Service Official Recommends Coming Heavily Down on Privacy-Oriented Cryptocurrencies

June 26, 2018 13:20
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Last week, an official from the US Secret Services appeared before the Congress and stated that the organization was concerned about the growing use of cryptocurrencies to carry out criminal activities.

Robert Novy, who is currently serving as the Deputy Assistant Director, Office of Investigations at the United States Secret Service said, “The Secret Service’s primary concern regarding this topic is digital currencies’ use in criminal schemes that undermine the integrity of financial and payment systems, their use in cases of fraud, and their general use as a means of money laundering.”

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“The Secret Service possesses a unique record of success in countering criminal uses of digital currencies, and we are committed to continuing to keep pace with technology innovation, as well as evolving strategies and tactics, of cyber criminals.”

He added, “We should also consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies, services intended to obscure transactions on blockchains (i.e. cryptocurrency tumblers or mixers) and cryptocurrency mining pools.”

Elaborating on his point, Novy opined that some crypto service providers and users attempted to go past the international and regulatory systems that were set up to counter illicit finance.

He said, “Based on Secret Service investigations into criminal use of digital currencies, criminals prefer digital currencies they assess to have the following characteristics namely, widespread adoption as a medium of exchange for intended criminal activities, greatest degree of anonymity, protection against theft, fraud and lawful seizure and can be readily exchanged to and fro their preferred currency.”

Not restricting himself to cryptocurrencies, Novy also pointed out what were the design flaws in blockchain. He said, “The growing popularity of blockchains has also resulted in the growth of criminal activities closely related to its proprieties. These include: crypto-jacking, thefts of private keys, ransomware, and attacks on blockchain networks themselves.”

Although recently, the Securities and Exchange Commission (SEC) has vocalized its desire to keep a closer eye on cryptocurrencies and Initial Coin Offerings (ICO) by creating a new position, there has not been much progress in regulations since then.

Novy advised the Congress, that to prevent such financial crimes, it is important that the body work closely with organizations such as Financial Action Task Force.

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