The commissioner of the US Commodity Futures Trading Commission (CFTC), Christy Goldsmith Romero, has called for regulation of cryptocurrencies, citing the risks they pose to national security and the prevalence of illicit financial use cases.
The CFTC boss blames anonymity for crimes in the crypto sector
Speaking at a recent event in London, Romero highlighted the role of cryptocurrencies in facilitating the financing of terrorism, drug trade, darknet markets, cyber gangs, money laundering, and malicious state-sponsored activity.
Despite the transparency provided by public blockchains, she said the allure of anonymity presented substantial risks, and cited a Chainalysis report that found $3.8 billion was stolen in crypto hacks in 2022.
However, investigative agencies from the FBI to the Treasury Department to the IRS have made progress in tracking, arresting, and sanctioning criminals who have committed crypto crimes.
The Treasury’s Office of Foreign Assets Control (OFAC) has been imposing sanctions on individuals with ties to North Korea and the Lazarus group since 2019. On April 24, OFAC announced three more sanctions on individuals with such ties.
Romero wants coordinated crypto regulation
Despite these efforts, a recent Treasury review on decentralized finance found that criminals are still using fiat currency to conduct illicit transactions. Romero believes that anonymity is the key to crypto’s illegal use cases and called for the private sector and international governments to coordinate in regulating cryptocurrencies.
The CFTC boss also urged the industry to work together with regulators and lawmakers to stop wrongdoing, while not losing sight of the broader objectives in society. Cryptocurrencies transcend borders, and there can be “no safe passage” for illicit finances to keep the global financial system safe.
As the use and adoption of cryptocurrencies continue to grow, regulatory efforts to address their risks and potential benefits will undoubtedly continue to be a topic of discussion in the industry and among policymakers.
