Trump's Budget Proposes $2.4 Billion Funding for Secret Service to Police Crypto
President Trump's $4.8 trillion budget proposal has an interesting take on the crypto sector. According to the proposal, the US Secret Service would be given up to $2.4 billion to police activities in the crypto sector. The goal is to have the Secret Service police illegal criminal activity involving crypto and attempt to end it.
What It States
The budget proposal wants the Secret Service to be the federal agency responsible for monitoring the use of crypto for terror financing and money laundering. It states that in recent decades, technological advancements such as crypto, coupled with the interconnectedness of the financial world, have made it easier for complex criminal organizations to exist. The result has been the deepening of ties between the electronic and financial crimes with terror financing and rogue states. It proposes that the US Secret Service be returned to the Treasury Department to enhance the efficiency of investigations into financial crimes to ensure the US can deal with the emerging threats.
For over a decade, the Secret Service has been under homeland security, but it could now be moved back to the Treasury Department if this proposal is approved. Treasury Secretary Steve Mnuchin recently commented on the proposal. He noted that the budget would help to enhance the national security of the US by increasing funding to the Office of Terrorism and Financial Intelligence, which is under the treasury department. This office is responsible for fighting terrorism globally. Additionally, the Treasury Secretary said that it would enhance the abilities of the Financial Crimes Enforcement Network to protect Americans from cybercrime. He added that returning the Secret Service to the Treasury Department would be crucial to helping the US fight the threats of the future.
Streamlined Regulation for the Crypto Sector
Returning the Secret Service to the Treasury Department could help to create a trifecta of regulation and enforcement within a single department. Currently, efforts to fight crypto crime are being pursued by the Financial Crimes Enforcement Network and the Office of Foreign Assets Control (OFAC). They have been heavily policing crypto crimes in the past few years.
During a Law360 interview, former litigator at the DOJ Laurel Rimon noted that this move signals a consolidation of efforts to police the crypto sector. According to Rimon, this appears to be part of an effort by the Trump Administration to prevent terror financing and money laundering using crypto.
This budget proposal comes amid an effort by US lawmakers to create regulation to streamline how federal agencies police the crypto sector. This regulation lays out clear rules on how agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would regulate the crypto sector.
Trump is Not a Fan of Crypto
In the past, the US president has tweeted his distaste for crypto. In July last year, he tweeted that he was not a fan of Bitcoin. He noted that cryptocurrencies were not real money, and they derived their value was "based on thin air". He also took the opportunity to discuss Facebook's Libra. Trump said that if they wanted to launch Libra, they should be regulated under the same tough rules that govern the banking sector.
While the US has generally being opposed to crypto, it is worth noting that the total market capitalization of the crypto industry is less than one percent of the entire financial sector. Besides that, most crime in the world still involves fiat currency, and criminal activities relied entirely on fiat before the invention of crypto. However, it is important to ensure that criminals do not find a haven in the crypto industry, which could only lead to further opposition by regulators.
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