The US Secret Service, whose responsibilities include investigating financial crimes, such as fraud and counterfeiting along with protecting high ranking government officials, is calling on Congress to weigh potential legislation that would affect the usability of privacy cryptocurrencies.

Robert Novy, the deputy assistant director for the Secret Service’s Office of Investigations, stated that Congressional action on privacy coins is needed while speaking in front of the US House of Representatives Committee on Financial Services.

“We should also consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies, services intended to obscure transactions on blockchains and cryptocurrency mining pools," Novy said.

No specific privacy coins were mentioned during the hearing, and all references to the cryptocurrencies were general statements. It is important to note that Novy did distinguish between privacy coins and other types of cryptocurrencies and remained focused on coins that could enable money laundering and other criminal schemes.

He further stated:

“While some digital currencies have operated lawfully, others have been used extensively for illicit activity…The growing illicit use of digital currencies risks undermining the effectiveness of existing U.S. laws and regulations, especially those intended to limit the ability of criminals to profit from their illicit activities.”

Other government officials in the US agree with Novy’s assessment. Greg Nevano, an official for the Immigration and Customs Enforcement Agency, told Forbes that privacy coins are allowing criminal organizations to bypass law enforcement.

“These new anonymity-enhanced cryptocurrencies are clearly ripe for illicit use in an effort to subvert legitimate law enforcement inquiries…although it is more difficult to trace the movement of illicit proceeds using these newer anonymity-enhanced cryptocurrencies, it is not impossible.” Nevano said.

The Zcash company, whose decentralized cryptocurrency focuses on privacy, responded to the statements by government officials, saying:

“We believe it is in the best interest of the citizens of the United States, the US Secret Service, and other governmental organizations to advocate for privacy rights and protect its citizens and businesses from harm.”

Their statement is consistent with their stated goal of protecting the privacy rights of everyday citizens.

Although the Congress may eventually take action against privacy coins, it is unlikely that any legislation will be drafted or voted on anytime in the near future.