Office of Legislati ve Affairs

U.S. Department of Homeland Security

Washington, DC 20528

November 12, 2013 The Honorable Thomas R. Carper Chairman Committee on Homeland Security and Governmental Affairs United States Senate Washington, DC 20510 Dear Chairman Carper: Thank you for your recent letter requesting information related to virtual currencies. I appreciate this opportunity to comment on the Department of Homeland Se

curity’s

(DHS) expertise in this area. The most critical capability f or transnational organized crime is to quickly and quietly move large quantities of money across borders. The anonymity of cyberspace affords a unique opportunity for criminal organiz ations to launder huge sums of money undetected. With the advent of virtual c urrencies and the ease with which f inancial transactions can be exploited by criminal organizations, DHS has recognized the need for an aggressive posture toward this evolving trend. DHS, through its law enforcement components such as U.S. Immigration and Customs Enforcement and the U.S. Secret Service, has been actively investigating the emerging threat and criminal exploitation of virtual currency systems that further transnational criminal operations. This effort includes t argeting the underground black markets on the I nternet that are operated by transnational crimi nal networks. The multi-prong strategy employed by DHS also targets the virtual currency platforms and the network of virtual currency exchange makers. The strategic plan to combat this criminal activity r elies heavily on building upon new and existing interagency partnerships as well as educating financial institutions, specifically their Anti-Money Laundering Departments, on this criminal methodology. DHS is committed to safeguarding the N

ation’s financial payment systems by