U.S. Representative Sean Casten has revived the long-standing debate over cryptocurrency’s role in national security, arguing during a March 5 House Financial Services Committee hearing that “crypto-friendly rules” could enable illicit financial activity.
While his remarks were made in the context of the Taiwan Conflict Deterrence Act of 2025, Casten’s concerns are nothing new.
For years, lawmakers and regulators have used national security as a key argument to justify tighter restrictions on the crypto industry, though with the Trump administration an unprecedented relaxing of regulation is currently taking place.
Casten’s position mirrors past rhetoric from influential figures like Senator Elizabeth Warren, who has frequently called for stricter regulations on digital assets. Warren has long maintained that cryptocurrency is a tool for criminals, particularly in cases of ransomware, money laundering, and sanctions evasion. In 2023, she introduced legislation aimed at expanding the U.S. Treasury’s authority to police crypto transactions, citing risks to national security.
Other prominent figures, including former Treasury Secretary Janet Yellen and SEC Chair Gary Gensler, have also raised concerns about crypto’s potential misuse. Yellen, in particular, has emphasized the need for increased regulatory oversight, warning that digital assets could undermine global financial stability if left unchecked.
Sanctions Evasion and Terrorism Financing: A Recurring Concern
The U.S. government has a history of citing crypto as a tool for evading sanctions and financing terrorism. In 2022, the Treasury Department sanctioned Tornado Cash, a privacy-focused crypto mixer, alleging that it had been used to launder over $7 billion, including funds tied to North Korean hackers. The move marked a significant escalation in the U.S. government’s efforts to curb the use of crypto in illicit finance, reinforcing the perception that digital assets could pose a systemic threat.
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Similarly, in October 2023, a report from the U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN) suggested that crypto was being used by terrorist groups to move funds across borders. The report prompted renewed calls for stricter Anti-Money Laundering policies, with some lawmakers pushing for an outright ban on privacy coins and non-compliant exchanges.
Casten’s remarks also touched on ransomware, a topic that has frequently been linked to cryptocurrency. His claim that “100% of ransomware attacks are funded by crypto” aligns with concerns raised in previous government reports. In 2021, the FBI and the Department of Justice cracked down on multiple ransomware groups, recovering millions in Bitcoin from cybercriminals operating in Russia and Eastern Europe.
