Bitcoin’s Use for Illicit Purposes is a Major Concern: US Secretary of Treasury

Steven Mnuchin says his department is looking into the digital currency, particularly its potential usage for criminal activities.

United States Secretary of the Treasury, Steven Mnuchin, has stated that while there is currently no official word from the government regarding Bitcoin, his department is keeping a close watch on the cryptocurrency, owing to the possibility of its usage in illicit activities such as fraud, money laundering, and even terrorism financing.

During an interview with Yahoo Finance, Mnuchin said:

“It’s something we are looking at very carefully and will continue to look at. The first issue and the most important issue is to make sure that people can’t use Bitcoin for illicit activities. So we want to make sure that you don’t have the dark web funded in Bitcoins. And that’s something that is a concern of ours today.”

Bitcoin has displayed tremendous growth since the start of 2017, shooting up to a record $7,800 from $1,000. Recently, following the cancellation of the SegWit2x hard fork, which had thrown the future of the cryptocurrency into uncertainty, Bitcoin has dropped below the $7,000 mark. However, its volatility, coupled with the anonymity of transactions, continue to unnerve governments and regulatory bodies alike, and Mnuchin stated that he was in contact with government officials in other countries, as they attempt to find solutions to these issues.

“So if you’re a Bitcoin dealer in the United States, you have the…customer requirements and BSA requirements. And those are issues I’m discussing with all my international counterparts. So our number one issue is, we want to make sure that this is not used for illicit transfers of funds.”

When asked about when an official statement from the Treasury could be expected on the matter, Mnuchin said that there was “nothing specific” that had been chalked out in terms of a timeline. However, he added:

“… we do have working groups that are looking at this. And again something we’ll be watching very carefully.”

Mnuchin’s comments come shortly after the inspector general of the U.S. Treasury Department published the Annual Plan Fiscal Year 2018, which says:

“We plan to determine how FinCEN [Financial Crimes Enforcement Network] identifies, prioritizes, and addresses money laundering and terrorist financing risks associated with virtual currencies.”

In addition, last month the United States Attorney General Jeff Sessions informed the Senate Judiciary Committee that more than a thousand accounts had been discovered on the illegal AlphaBay marketplace, where users of the dark web were using Bitcoins and other anonymous transaction methods.

The IRS is also hot on Bitcoin’s trail, and has been pushing to investigate large individual profits by demanding access to user records on Coinbase, a US Bitcoin exchange online.

Bitcoin and other cryptocurrencies have been a topic of contention among governments – most countries, such as China and Russia, have voiced their intention to create Central Bank-issued digital currencies. Earlier this month, Citi Group CEO Michael Corbat said that Bitcoin was threatening enough for governments the world over to start issuing their own versions of virtual currencies, rather than permitting the usage of privately-held cryptocurrencies.