A crypto analytics startup will recommend the U.S. Congress call for more stringent anti-money laundering (AML) enforcement around exchanges facilitating the trade of privacy coins during a hearing on how cryptocurrency is being used in human trafficking.

At a Wednesday hearing revisiting landmark legislation passed 20 years ago, the House of Representatives’ Tom Lantos Human Rights Commission will look at the impact of the Trafficking Victims Protection Act, as well as analyze new, technology-enabled threats that need to be addressed. Liat Shetret, head of policy and research at London-based crypto forensics firm Elliptic, is scheduled to testify at the hearing.

Elliptic co-founder Tom Robinson told CoinDesk that cryptocurrency and the dark web are two such areas the House commission will examine.

Shetret is expected to explain how current tools can help law enforcement agents track illicit cryptocurrency payments. Elliptic tells CoinDesk the U.S. can play a leadership role in creating new regulations – or supporting the recommendations of the Financial Action Task Force (FATF) – around the global use of cryptocurrencies.

One recommendation Shetret is slated to submit: Exchanges using privacy coins should be subject to strict AML rules.

Previous testimony on human trafficking has been critical of cryptocurrencies’ role, driving recommendations that Congress increase regulatory oversight of the industry, Robinson said.

“What I want to do is put cryptocurrency usage in some context and say … the availability of blockchain analysis has been successful in curbing illegal use of cryptocurrency,” he said.

Indeed, fellow crypto analytics startup Chainalysis announced inOctober it had worked with the U.S. Department of Justice (DOJ) to trace bitcoin transactions associated with the web’s largest child porn site. The DOJ arrested or indicted nearly 40 individuals, several of whom were traced through their bitcoin use.

Privacy coin concerns

While a large number of crypto transactions can be traced, privacy coins are an exception.

To that end, Shetret’s prepared remarks, which were shared with CoinDesk, will recommend Congress and regulators develop new guidance for banks and crypto exchanges on how to approach privacy coins and the individuals who trade them.

“We respect every individual’s right to financial privacy, and privacy coins have societal value,” Shetret’s testimony says, citing people living under authoritarian regimes.

Still, privacy coins are being used by criminals, and most dark web marketplaces currently accept these cryptocurrencies, she said.

“Regulators should ensure that cryptocurrency businesses that support privacy coins enforce anti-money laundering policies that are appropriate to the lack of traceability inherent to them,” she said.

As part of this, Shetret calls for the Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department’s money laundering monitor, to issue guidance specifically detailing how privacy coins should be treated.

Shetret told CoinDesk in a phone call that Congress should be commended for looking at cryptocurrencies, but the U.S. government and financial institutions should fully grapple with crypto’s incumbent risks.