U.S. Treasury Secretary Steven Mnuchin agrees with his boss that crypto is for crooks.
In a press conference Monday, Mnuchin voiced the Trump administration’s concerns with Facebook’s Libra and cryptocurrencies like bitcoin. Mnuchin’s statements come ahead of two hearings on Capitol Hill this week, in which Facebook blockchain lead David Marcus is expected to testify before both Senate and House lawmakers.
The press conference also follows a series of tweets from President Donald J. Trump last week regarding cryptocurrencies and Libra. At the time, Trump said cryptocurrencies are used in “unlawful” activities such as drug trafficking. In a subsequent tweet, Trump said Facebook might have to acquire a banking charter to conduct business with Libra.
While Mnuchin did not make any new policy statements Monday, he did reiterate statements made by various government entities in the past, describing the potential for cryptocurrencies to be used by criminals as one main issue.
“Libra could be misused by money launderers and terrorist financiers,” Mnuchin said, using money laundering, terrorist financing, extortion, human trafficking, drug trafficking and tax evasion as examples of crimes that could be facilitated by cryptocurrencies and Libra. He added:
“This is indeed a national security issue.”
The Financial Crime Enforcement Network (FinCEN) will be examining Libra and bitcoin, and will hold any entity that transacts with either “to the highest standards,” Mnuchin said.
Mnuchin also referenced the Financial Action Task Force (FATF), which published guidance for central banks on how to regulate cryptocurrency service providers last month. In particular, the FATF guidance recommends enforcing the so-called “travel rule,” which requires exchanges and wallet providers to hold KYC information on the recipients of transactions.