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Treasury Secretary Janet Yellen has underscored the urgency of implementing far-reaching reforms to U.S. anti-money laundering rules amid a rise in fraud schemes, hacking, identity theft and other financial and online crimes driven by the novel coronavirus pandemic.

Yellen made the remarks at the Treasury Department’s first “innovation policy roundtable,” an online forum on Wednesday and Thursday in which regulators and industry representatives discussed how new technologies could help anti-financial crime compliance systems and expand access to banking for underserved communities.

The new secretary, whom U.S. senators approved to lead the department on Jan. 25 by a vote of 84 -15, voiced support for new financial technology during the roundtable, but also sounded caution over their potential for criminal exploitation.

“The misuse of cryptocurrencies and virtual assets is a growing problem,” Yellen said. “I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers, they’ve been a tool to finance terrorism.”

In her nomination hearing on Jan. 19, Yellen told senators she would prioritize implementation of the Anti-Money Laundering Act of 2020, which, among other requirements, obligates Treasury to build a database of beneficial owners, extend Bank Secrecy Act rules to dealers in antiquities, and regularly and publicly identify the top financial-crime threats facing the U.S.

“When Congress passed the Anti-Money Laundering Act in December, it gave our department a mandate to renovate the framework for combating illicit finance,” Yellen said Wednesday. “That framework was designed in the 70s and has been more or less the same ever since. The update couldn’t have come at a better time.”

U.S. lawmakers and officials made the latest substantial revisions to the Bank Secrecy Act nearly 20 years ago, when they passed the Patriot Act in the aftermath of the Sept. 11 terrorist attacks.

Yellen voiced concerns over terrorists’ growing reliance on cryptocurrencies to raise and move funds at her nomination hearing last month, sharing her belief that “many” digital tokens are “mainly” used to further illicit activity.

Biden ordered a regulatory freeze after taking office, instructing his political appointees across the executive branch to review hundreds of pending rules advanced by the administration of former President Donald Trump during his waning days in office.

The Treasury Department must now decide whether to move forward with a Dec. 23 proposal by the Financial Crimes Enforcement Network that would expand reporting and recordkeeping obligations to cryptocurrency exchanges that handle transactions to and from wallets not hosted at regulated institutions.

Cryptocurrency firms and enthusiasts largely characterized the plan as an example of government overreach in more than 7500 comments submitted to FinCEN by the initial Jan. 7 deadline.

On Thursday, the Treasury Department separately disclosed designations against nearly a dozen military officials and three companies in Myanmar suspected of orchestrating the Feb. 1 coup against the nation’s democratically elected government.

Yellen said in a statement that the department stands ready to take additional action if the crackdown against peaceful demonstrators continues.

Contact Valentina Pasquali at vpasquali@acams.org