Three successive reports published by the US Treasury Department in 2023 and 2024 highlighted the increasingly frequent use of crypto to launder dirty money and finance illicit activities. Although cash remains the main vector, virtual currencies worry the authorities because of their relative anonymity and the difficulty of tracing transactions.
Crypto increasingly used by crime
In its latest three national risk assessment reports, the US Treasury highlights that criminals, fraudsters and illegal actors are increasingly turning to crypto to launder money from fraud, drug trafficking , human trafficking or corruption.
This is due to the decentralized nature of cryptocurrencies like Bitcoin, which allows a certain anonymization of transactions. Crypto mixers and tumblers, which blur the line between the origin and destination of funds, are also being singled out.
Even if the use of cash remains the majority, the increase in laundering volumes via crypto is worrying the American authorities. The Treasury mentions amounts of several hundred million dollars laundered each year through this means.
Answers on the table to strengthen supervision
Faced with this observation, the American government is considering different responses to strengthen the supervision and traceability of crypto transactions. The objective is to align obligations in the fight against money laundering between traditional players and the crypto world.
The Biden administration has therefore proposed a clearer definition of virtual asset service providers. With the aim of extending to them the rules of customer knowledge and suspicious activity reporting. Better coordination between government agencies is also recommended to combat this phenomenon effectively.
On the legislative side, a bipartisan bill passed in the Senate in 2023 aims to require any issuer of stablecoins to obtain a banking license and submit to the supervision of the authorities. Restrictions on the use of tumblers could also emerge.
But the challenges remain immense, in a constantly evolving cryptocurrency sector. International cooperation appears essential to stem a phenomenon that is by nature cross-border.
Despite the appeal of decentralized virtual currencies, US authorities are determined not to repeat past mistakes that allowed money laundering to proliferate. But finding the right balance between supervision and technological innovation proves delicate. The crypto sector will also have to redouble its efforts internally to clean up its image and preserve its credibility.
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