Janet Yellen Warns Crypto Is Used for Terrorist Financing

Janet Yellen Warns Crypto Is Used for Terrorist Financing

Janet Yellen, who is expected to lead the US Treasury Department for the incoming Joe Biden administration, raised concerns around the use of Bitcoin (BTC) and cryptocurrency by terrorists and money launderers.

During the Senate confirmation hearing, the Treasury secretary nominee and former Federal Reserve chair highlighted cryptocurrencies are a particular concern for law enforcement officials charged with policing money laundering and other illicit finance. 

“Cryptocurrencies are of particular concern. I think many are used at least in a transaction sense mainly for illicit finance,” she said, adding that the US government should examine new ways to curb money laundering and “tech-terrorist financing” from occurring via cryptocurrency platforms. 

In her former post as Chair of the Federal Reserve from 2014 to 2018, Yellen has been skeptical about cryptocurrency, and in particular, Bitcoin, the largest cryptocurrency by market cap. In the past, Yellen described Bitcoin as a “highly speculative asset”, claiming that it doesn’t constitute legal tender.

Criminal Activity in Crypto Transactions Fell 

“She forgot to mention that the US dollar is the choice currency of criminals around the world. The large banks launder more money than the entire Bitcoin market cap,” tweeted Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, in response to Yellen’s critique. 
After Yellen’s critical comments, Bitcoin and altcoins recorded price corrections. At the time of writing, Bitcoin is currently trading at $35,531, down by 2.5%. After reaching a new all-time high at $1,428, Ethereum (ETH)’s price slightly fell to $1,377, with the 24-hour gain reducing to 4.1%. 

Criminal activity in crypto transactions fell sharply in 2020, according to new data from the blockchain analytics firm Chainalysis. Criminal transactions represented 0.34% ($10 billion) in 2020, dropping from 2.1% ($21.1 billion) of all crypto activity in the previous year.