In brief

  • Janet Yellen is President-elect Biden’s pick for Secretary of the Treasury.
  • In her confirmation hearing on Tuesday, she spoke on the relationship between cryptocurrencies and criminal activity.
  • Crypto’s role in terrorist financing and money laundering, she said, was “of particular concern.”

In her Senate confirmation hearing on Tuesday, Janet Yellen—President-elect Joe Biden’s pick for Secretary of the Treasury—said that “cryptocurrencies are of particular concern” for their role in facilitating criminal activity, and that she’ll be keeping a close eye on them in her new role.

In response to a question from Senator Maggie Hassan of New Hampshire about how Yellen’s Treasury Department would work to rein in crypto-financed crimes, and terrorist financing in particular, Yellen said, “We need to make sure that our methods for dealing with these matters, with tech-terrorist financing, change along with changing technology.”

She continued: “Cryptocurrencies are of particular concern. I think many are used, at least in a transaction sense, mainly for illicit financing. And I think we really need to examine ways in which we can curtail their use, and make sure that anti-money laundering [sic] doesn't occur through those channels.”

Yellen, who chaired the Federal Reserve from 2014 to 2018, has been critical of cryptocurrency, and Bitcoin specifically, in the past. 

“I will just say outright I am not a fan,” she said of Bitcoin at a fintech conference in 2018. And in a 2017 press event, Yellen said Bitcoin is “not a stable store of value, and it doesn’t constitute legal tender.”

According to new data from the blockchain analytics firm Chainalysis, criminal transactions represented 2.1% of all crypto activity in 2019; that number fell to .34% in 2020, though the company has warned that this is a conservative estimate—the number will grow to something more accurate as new scams are unearthed.

Crypto utopians hoping for a Bitcoin-friendly Treasury may have to keep waiting.