United States Treasury Secretary Janet Yellen on Wednesday warned about an “explosion of risk” from virtual markets, which includes the embezzlement of cryptocurrencies. However, she said that the new financial technologies could also be helpful to fight crime and reduce inequality in the society, news agency Reuters reported.

Further, she said that the Anti-Money Laundering Act which was passed in December will allow the government to make a framework for present day financial illicit as the laws have largely been unchanged since the 1970s.

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Yellen told the policymakers, private sector experts and regulators that, “the update couldn’t have come at a better time.” She also added that the passage of Act was necessary as we live amidst an explosion of risk, where fraud, terrorist financing, money laundering and data privacy can smoothly take place.

She also said that such technologies could be used to support the flow of dark money from organised crime and fight back against hackers, but she also insisted on reducing digital gaps in the US. 

Cryptocurrencies and virtual currency have offered promises, however they had also been used to launder the money of drug traffickers and to finance terrorism, she said. 

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The coronavirus pandemic has set off more and more cyberattacks which are aimed at hospitals, banks, schools and the government itself, she added.

Previously, Yellen while briefing said that she was considering to limit the use of cryptocurrency as she was afraid that it could easily help in financing terrorism. But she was looking forward to responsible innovation that could bring the change that is needed.

Innovation is very essential in this sector that could help address problems and give people access to the financial system, and she also promised to reduce inequality and disparities in the society. She stated that the pandemic brought out huge problems that need to be fixed such as the dearth of broadband access in many parts of the country.

“Innovation should not just be a shield to protect against bad actors. Innovation should also be a ladder to help more people climb to a higher quality of life,” she said.