By Yasin Ebrahim
Investing.com - Bitcoin eased from session highs on Tuesday after incoming U.S. Treasury Secretary Janet Yellen flagged concern about the use of cryptocurrencies to fund "illicit" activities at a time when some worry that regulatory scrutiny beckons for the industry.
Bitcoin (BitfinexUSD) rose 1.7%% to $36,428, after hitting a session high $37,936.
“I think many [cryptocurrencies] are used, at least in transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,” Yellen said Tuesday.
"[W]e need to make sure that our methods for dealing with these matters, with tech terrorist financing, change along with changing technology, cryptocurrencies are a particular concern," Yellen said in response to a question New Hampshire Democratic Senator Maggie Hassan.
Still the move spooked cryptocurrency participants and stoked fears that regulatory scrutiny on cryptos could intensify just as the U.S. Securities and Exchange Commission is set for new leadership.
President-elect Joe Biden named Gary Gensler as his pick for chairman of the U.S. SEC on Monday.
The incoming Gensler, who teaches a class on blockchain technology, has earned a reputation as a tough regulator after bringing in regulatory reforms to clean up the derivatives market in the wake of the financial crisis.
Gensler is expected to prioritize investor protection, with regulatory guidance around cryptocurrency investing widely touted to come under his purview.