Randal Quarles, Vice Chairman of the US Federal Reserve, testified in front of the Senate Banking Committee this week as part of the Semiannual Testimony on the Federal Reserve’s Supervision and Regulation of the Financial System.
While much of the discussion swirled around the economy and the impact of COVID, Quarles did make a comment of note pertaining to cryptocurrency. According to a brief report by Reuters, Quarles said that a group of US regulators are in a “sprint” to address crypto and illicit activity. Quarles stated:
“We along with the OCC and the FDIC are engaged right now in what we are calling a sprint in seeking to pull together views on exactly that” said Quarles addressing crypto activity. A joint framework for supervision is a “high priority” he added and said he expects to have some results “soon.”
There have been many high-profile cases of bad actors using crypto to transfer value outside the traditional banking system. FATF rules that are gaining traction, should mitigate some of this illicit activity. The fact that distributed ledger technology typically incorporates public information on transactions and transfers has lead to the rise of tech firms that can analyse this information and uncover nefarious activity. Still, recent comments by federal officials indicate that heightened concern remains regarding crypto and criminal activity.