A bipartisan effort by US senators aims to empower the Secret Service beyond its traditional roles to combat crimes involving digital assets effectively. They have put forward a proposal to grant the Secret Service enhanced investigative and prosecutorial powers to address the rising threat of illegal money laundering and criminal exploitation of cryptocurrencies.
Key Points of the Proposed Law
The bill named the Combating Money Laundering in Cybercrime Act of 2024 was introduced by Sens. Amy Klobuchar (D-Minn.), Chuck Grassley (R-Iowa), and Catherine Cortez Masto (D-Nev.). If passed, it would equip the Secret Service with broader authority to investigate crimes involving digital assets such as financial institution fraud, structured transactions, and unlicensed money transmitting enterprises.
Sen. Masto highlighted the serious threat posed to national security by the use of digital assets to fund illegal operations. The bill requires a Government Accountability Report (GAR) to be issued within a year to assess the efficacy of law enforcement in detecting and deterring money laundering activities.
Strengthening Secret Service Capabilities
The emergence of cryptocurrencies has necessitated new strategies to combat financial crimes, leading to this proposed legislation. Sen. Grassley emphasized the importance of enhanced threat assessments to effectively pursue illicit financial entities involved in money laundering and other illegal practices.
The Secret Service has been operating a Cyber Investigative Section since 2004, dedicated to addressing cybercrimes. In 2020, the agency announced the formation of Cyber Fraud Task Forces to enhance collaboration and expertise in investigating financially motivated cybercrimes by merging the Electronic Crimes Task Forces and Financial Crimes Task Forces.
Increased Efforts and Bipartisan Backing
A similar bill to the CMLC2024 was introduced by nine lawmakers earlier in the year, indicating bipartisan support for establishing new regulations to mitigate risks associated with the rapidly expanding digital currency market.
Sen. Masto’s latest legislative effort focuses on cryptocurrency and money laundering, following a previous bill introduced in September of the previous year aimed at closing loopholes and ensuring compliance of cryptocurrency businesses with government regulations related to counterterrorism and anti-money laundering.
Chainalysis reported that illegal addresses laundered over $22 billion worth of cryptocurrency in 2023, representing a decrease of about 30% from $31.5 billion in 2022. Despite this, the US Treasury highlighted that cash remains the primary tool for money laundering in the country. Nevertheless, government entities have intensified efforts to combat crypto-related crimes in recent years.
Image source: Secret Service, chart from TradingView
