New Bill Expands Secret Service's Role

A new bill aims to expand the Secret Service’s authority to investigate and prosecute crimes involving digital assets. Titled the "Combating Money Laundering in Cybercrime Act of 2024," the legislation targets the growing threat of criminal activities using cryptocurrencies. This bipartisan initiative suggests the Secret Service could play a crucial role in combating digital financial crimes alongside its traditional duties.

Senators Amy Klobuchar (D-Minn.), Chuck Grassley (R-Iowa), and Catherine Cortez Masto (D-Nev.) have introduced the bill. The proposal would empower the Secret Service to investigate crimes involving digital assets, such as financial fraud, structured transactions, and unlicensed money transmission. The goal is to address the security risks posed by the illegal use of digital currencies.

Senator Masto has highlighted the significant national security threat posed by illegal activities funded through digital assets. The bill also mandates the development of a Government Accountability Report (GAR) within one year to evaluate how effectively law enforcement is detecting and preventing money laundering.

Cryptocurrencies have created new opportunities for illegal activities, prompting the need for enhanced regulatory measures. Senator Grassley emphasized the importance of improving threat assessments to effectively pursue companies involved in money laundering and other illicit activities.

Since 2004, the Secret Service has operated a Cyber Investigative Section focusing on cybercrime. In 2020, the agency launched Cyber Fraud Task Forces to improve collaboration and expertise in investigating financial cybercrimes by merging Electronic Crimes Task Forces and Financial Crimes Task Forces.

Earlier this year, nine lawmakers introduced a similar measure, reflecting bipartisan support for guidelines to manage the risks of digital currencies. Senator Masto has been proactive in addressing money laundering with digital assets; last year, she introduced legislation to close loopholes and ensure compliance with regulations on counterterrorism funding and anti-money laundering.

Chainalysis reported that in 2023, illegal activities laundered over $22 billion in cryptocurrency, a 30% drop from $31.5 billion in 2022. Despite this decrease, the U.S. Treasury stated that cash remains the primary tool for money laundering in the U.S. However, the U.S. Treasury, Department of Justice, SEC, and CFTC have increased their efforts to combat crypto crime.

The proposed bill seeks to strengthen the Secret Service’s role in financial regulation and crime prevention in the digital asset space. By granting the agency more investigative powers, lawmakers aim to equip it better to handle digital asset crimes.

Cryptocurrencies, while beneficial for many legitimate purposes, have also been exploited for criminal activities due to their anonymity. Criminals use digital assets for fraud, money laundering, and illegal financing without detection. The bill acknowledges these challenges and aims to equip the Secret Service with the necessary tools to combat them effectively.

Bipartisan support for this legislation highlights the urgency of addressing the changing landscape of financial crimes. As digital currencies become more mainstream, regulatory frameworks must evolve to ensure they are used legally and responsibly.

The "Combating Money Laundering in Cybercrime Act of 2024" is a significant step toward strengthening the U.S. response to digital asset-related crimes. By expanding the Secret Service’s role, the legislation aims to enhance national security and protect the financial system from abuse. The bill also underscores the need for continued collaboration between government agencies and lawmakers to address challenges in the digital currency market.