Brian Nelson, President Joe Biden’s nominee for under secretary for the Department of the Treasury’s division on terrorism and financial crimes, said he would prioritize implementing new regulations around cryptocurrency.
In a Tuesday hearing of the Senate Committee on Banking, Housing, and Urban Affairs, Nelson said he would be focusing on anti-money laundering, or AML, regulations if he were to be confirmed for the position in the Treasury Department’s terrorism and financial intelligence arm, adding cryptocurrency would be a particular priority.
Responding to a question from Nevada Senator Catherine Cortez Masto regarding “the damage done by crypto heists,” Nelson said the Anti-Money Laundering Act of 2020 reflected expanded regulators’ ability to prevent cryptocurrencies from undermining existing laws. However, he implied the creation of crypto was also part of “responsible innovation” in the United States.
“If I am confirmed, I will prioritize implementing the pieces of that legislation, including new regulations around cryptocurrency,” said Nelson. “I think that legislation provided new authorities — or clarified the law — that cryptocurrencies or currency in whatever form, be it virtual or fiat, is covered by the Bank Secrecy Act.”
The Financial Crimes Enforcement Network, or FinCEN, operating within the Treasury Department, has previously used the Bank Secrecy Act, or BSA, to apply to cryptocurrencies in certain cases, though the legislation was passed back in 1970. Nelson said the BSA was a “powerful tool to allow FinCEN to ensure that no matter the form of the currency that they have the tools to regulate.”
“It reflected a balancing of regulating to prevent virtual currency and other types of new technology from undermining our anti-money laundering system while also being respectful of the fact we need to support responsible innovation and preserve that here in the United States.”
At the same Senate hearing, Elizabeth Rosenberg, Biden’s nominee for Assistant Secretary for Terrorist Financing at the Treasury Department, said she would look at making the current AML regulatory requirements for crypto “appropriate and consistent.” Janet Yellen, the current Treasury Secretary, previously called cryptocurrency a “particular concern” for AML, adding she believed it was “mainly for illicit financing.”
FinCEN proposed regulations earlier this year which would consider convertible digital currency or digital asset transactions subject to similar anti-money laundering and combating the financing of terrorism requirements. Last month, the Treasury Department also called for exchanges and custodians to report crypto transactions greater than $10,000 to the Internal Revenue Service.