US lawmakers tighten screws vs crypto use for illegal activities

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Federal lawmakers are putting the Comptroller General of the United States to work on a number of laws and regulations that will end the rampant drug and sex trafficking business, which have been punting on cryptocurrencies, in the country.

On Monday, the U.S. House of Representatives passed HR 6069, otherwise known as “Fight Illicit Networks and Detect (FIND) Traffic Act of 2018.” The bill, sponsored by Rep. Juan Vargas, would enable Congress to develop methods regulating the use of cryptocurrencies in an attempt to prevent illegal drug sales as well as sex trafficking. Vargas is hopeful the Senate will be supportive of the bill, which is already with the Senate Committee on Banking, Housing and Urban Affairs.

“This bill is an important first step in helping Congress understand the full extent of how virtual currencies are being used to facilitate drug and sex trafficking and will help us propose effective legislative solutions to fight these crimes,” Vargas said in a statement.

One of the major reasons why virtual currencies are being used as a means of payment for illegal activities is that they are usually anonymous, especially privacy-centric coins like Monero and Zcash. According to the bill, sex trafficking and drug sales are amongst the most detrimental activities which are taking place on the dark web and online marketplaces which are unregulated and use cryptocurrencies as a payment method.

The bill gives powers to the Comptroller General to determine how payment methods facilitate the buying, selling and financing of these illegal activities. In particular, U.S. lawmakers want an explanation of how illegal funds sent through virtual currencies are transmitted into the regular banking system via money laundering or other similar methods.

The bill also seeks information on “to what extent can the immutable and traceable nature of virtual currencies contribute to the tracking and prosecution of illicit funding.”

The Drug Enforcement Administration’s 2017 National Drug Assessment previously reported that criminal organizations are increasing their use of privacy-centric digital coins for illegal activities. In fact, just last Wednesday, the U.S. Department of Justice seized more than $20 million in cryptocurrencies in an undercover operation that unmasked more than 50 vendors in darknet markets like Hansa, Dream, Silk Road and Alpha Bay.