Topic: [2017-06-10]Bitcoin Experts to Congress: Overseas Exchanges Are Enabling Cybercr (Read 2683 times)

Bitcoin Experts to Congress: Overseas Exchanges Are Enabling Cybercrime

Bitcoin and blockchain experts are urging US lawmakers to ramp up pressure on unlicensed offshore exchanges.

Coming yesterday during a hearing held by a subcommittee within the US House of Representatives, the calls followed a notable string of ransomware attacks that have seen consumer data held hostage in exchange for bitcoin payments. The situation has also seen politicians taking a renewed interest in the more negative aspects of cryptocurrency technology in response.

Yet, the core problem, panelists told the committee members, is not in bitcoin purchases, it's that when criminals do use bitcoin or other cryptocurrencies for illicit purposes, they often go through exchanges hosted outside the US.

In statements, panelists sought to portray these businesses as unlicensed, unregulated and unwilling to abide by basic anti-money laundering and know-your-customer regulations, rules that digital currency exchanges in the US and Western Europe must abide by.

"Nearly 100% of ransomware campaigns cash out through platforms such as these. It's a huge problem," said Kathryn Haun, a former Assistant US Attorney and now a lecturer at Stanford University. "Not surprisingly, the bad actors are not using the Coinbases of the world."

Elsewhere, the hearing examined the use of cryptocurrencies to finance criminal activities such as terrorism, money laundering and cybercrime, all of which fall under the House Terrorism and Illicit Finance Subcommittee's mandate to explore the national security implications of new financial innovations.

Perhaps unsurprisingly against this backdrop, committee members expressed concern that nefarious activity is becoming more common, while remaining largely outside the reach of authorities.

"The reality is criminals today use cash, money service businesses and other means for illicit purposes, but we've provided law enforcement the regulatory tools to catch the bad guys," said Representative Ed Perlmutter of Colorado, the top Democrat on the committee.

http://www.coindesk.com/bitcoin-experts-to-congress-overseas-exchanges-are-enabling-cybercrime/