WASHINGTON, D.C.— Legal Director and Securities Specialist Stephen Hall issued the following statement on Better Markets’ fact sheet, “The Reality Behind the Myth of Transparent Blockchains,” released ahead of a House Financial Services Committee Hearing today entitled “How America and Its Allies Can Stop Hamas, Hezbollah, and Iran from Evading Sanctions and Financing Terror” and Senate Banking Committee Hearing tomorrow entitled “Combating the Networks of Illicit Finance and Terrorism.”
“The recent events in Israel and the reported funding of Hamas through crypto confirms yet again that crypto’s principle role is to facilitate criminal activities and other atrocities across the globe. That should give policymakers, regulators, investors, and all concerned citizens pause about efforts to legitimize and expand access to crypto.
“To deflect and deny this reality, the cryptocurrency industry continues to insist that cryptocurrencies are not effective tools for illicit activities because the blockchains on which transactions are recorded are supposedly public and transparent. However, these arguments are baseless. The undeniable truth is that cryptocurrencies have quickly become an effective and favored tool for money laundering, terrorist financing, ransomware attacks, and sanctions evasion. The blockchain transparency claimed by crypto promoters is a myth.
“While blockchains can be public ledgers that record transactions, the reality is that these ’transparent’ entries only record transactions from one digital wallet to another. Digital wallets themselves are reflected on the blockchain as a random series of letters and numbers without any other identifiable information. While law enforcement may be able to track illicit funds on a blockchain, it is much more difficult to identify the beneficial owner of a digital wallet in a blockchain transaction. As we explain in our Fact Sheet, crypto scammers can operate for years without detection thanks to the opaque nature of this market.
“Cryptocurrencies have inflicted huge losses on investors without demonstrating any credible use case. As we also explain in our fact sheet, the notion that the blockchain technology underlying cryptocurrencies represents a transparent medium that can assist law enforcement and thwart criminals is, like so many claims surrounding crypto, a false claim, offered as part of the desperate attempt to legitimize this dangerous craze in finance.”
Read the Fact Sheet here.
Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.