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Witnesses from U.S. security advisory firms note that crypto plays a role in foreign political interference during a senate hearing
Witnesses in the U.S. Congress voiced their concerns about the potential for using cryptocurrencies to make illegal campaign donations during a hearing of the Subcommittee on Crime and Terrorism held today, June 26.
The hearing, titled âProtecting Our Elections: Examining Shell Companies and Virtual  Currencies as   Avenues for Foreign Interference,â was led by Senator Lindsey Graham with Scott Dueweke of DarkTower, David Murray of the Financial Integrity Network, and Sheila Krumholz of the Center for Responsive Politics as witnesses.
Dueweke, who is also a director at The Identity and Payments Association (IDPAY), said during his testimony that virtual currencies are âtailor madeâ for affecting the U.S. political process. Dueweke notes that he includes both cryptocurrencies like Bitcoin (BTC) and other centralized virtual money systems in his analysis, saying that âcriminals find the relative anonymity of these systems to be a boon.â
According to Dueweke, the problem with the global reach of virtual currencies is that could lead to âa web of thousands of exchange points that connect every corner of the world to the United States, and potentially into the coffers of political candidates.â
Murray, the Vice President of the Financial Integrity Network, agrees with Duewekeâs assessment of the danger of virtual currency uses by foreigners to circumvent U.S. campaign law. He notes in his testimony that problems of transparency arise when cryptocurrencies are exchanged for other cryptocurrencies:
âExchangers can hop from jurisdiction to jurisdiction in pursuit of favorable regulatory regimes, and the anonymity that they afford users could be attractive to foreign adversaries seeking to thwart campaign finance laws.â
One of Duewekeâs main concerns is Russiaâs use of virtual currencies to affect the U.S. political system, noting that the countryâs interest in releasing its own cryptocurrency and its consideration of a 13 percent crypto tax would âpotentially plac[e] them in the position to benefit from money laundering using Bitcoin and other cryptocurrencies.â
Dueweke spoke highly of the âincredible possibilitiesâ of blockchain technology, noting that in regards to both crypto and blockchain, âthese systems are not inherently bad, no more so than using cash or credit cards, and should not have a stigma attached to them.â
At a different subcommittee hearing in May, one U.S. Congressman referred to blockchain as âworld-changing.â
Dueweke advocated for future cooperation on an international level, with a combination of both government bodies and private partnerships working on identifying criminal uses of virtual currencies:
âThe Committee would do well to set as a goal for itself to maintain and continuously establish the United States as the world's leading advocate of Internet payment systems, virtual currencies, and their use.â
Last week, the Ethics Committee of the U.S. House of Representatives issued a memorandum that all House Members must disclose their crypto holdings of more than $1,000.
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