Calls on Congress to Close Regulatory Gaps, Prevent Blockchain from Becoming Safe Haven for Abusers and Predators

“Protecting survivors of abuse should not be a partisan issue. And it certainly should not be an afterthought in our digital financial future.”

Video (YouTube)

WASHINGTON – In a House Financial Services Committee hearing, Congresswoman Ayanna Pressley (MA-07) highlighted how regulatory gaps in crypto blockchain enable abuse in intimate partner violence. Congresswoman Pressley called on Congress to close these gaps to prevent blockchain tools from becoming safe havens for abusers and predators.

A transcript of the Congresswoman’s question line, as delivered, is available below, and the full video is available here.

Transcript: Pressley Highlights How Crypto Blockchain Enables Abuse in Intimate Partner Violence
House Financial Services Committee
June 5, 2025

REP. PRESSLEY: Thank you to Ranking Member Waters for convening this Minority Day Hearing. Thank you to our witnesses for joining us.

Today, I’d like to speak not about market structure but actually about people. Specifically, women and survivors of intimate partner violence.

Now we already know financial abuse is a core component of intimate partner violence.

Abusers frequently control bank accounts, restrict access to money, stalk survivors through financial transactions, or drain shared assets to leave their partner economically trapped.

With traditional financial systems, there are red flags and mechanisms to detect this such as bank alerts and flagged withdrawals.

But in the crypto world, these protections vanish. Abusers can stash funds in anonymous wallets, bypass court-ordered freezes, or empty crypto accounts without a trace. We’ve seen reports where a husband hid $500,000 in Bitcoin during divorce proceedings and abusers used blockchain tools to exert coercive control.

Professor Allen, you’ve researched this issue. In your view, how does the decentralization of financial services, such as in blockchain-based wallets, make it harder to protect survivors of intimate partner violence from economic abuse such as stalking?

PROFESSOR ALLEN: Well, thank you very much for this important question.

I think it helps us to talk about the things that are not in the bill that should be, right, and there’s lots of them. This bill doesn’t address conflicts of interest within exchanges. It doesn’t address the operational risks associated with blockchain, and it doesn’t address the privacy risks associated with using the blockchain.

Blockchains are public. Anyone can see them. So if someone knows your public identifier, they can see every transaction that you do, and that can give away information about your location. It can give away information about if you’re trying to siphon off funds in order, well, not siphon, but put away funds in order to leave an abusive partner. All of that is going to be visible for all the world to see.

So that’s before we even get to the issue of the abusers themselves using crypto for criminal purposes or abusive purposes. This publicity of the blockchain is something that this law doesn’t grapple with at all.

REP. PRESSLEY: You know, and certainly, intimate partner violence is one of the most underreported crimes, making it challenging to quantify how many, specifically, victims of economic abuse. But it’s safe to say that without those elements being added, that many could be vulnerable.

PROFESSOR ALLEN: Of course, I mean, without addressing the privacy issue, it’s not just an issue for women. It’s also an issue for immigrants who don’t want their locations necessarily revealed. It’s an issue for people being profiled by law enforcement officers. You know this kind of publicity about literally every transaction you do being visible to the whole world is something that just hasn’t even been, the surface scratched.

REP. PRESSLEY: Thank you, Professor.

Traditional banks are subject to Know Your Customer (KYC) rules and fraud monitoring but crypto platforms, especially decentralized ones, currently operate outside that framework.

Professor Allen, can you expand on this regulatory gap and how it allows abusers to hide and move money in ways that would be impossible in the traditional banking system?

PROFESSOR ALLEN: Yeah. So the thing about crypto and the blockchain is that the technology is actually very inefficient. It’s slower and clunkier than your average database. Where it gets its efficiencies from is skipping regulatory requirements that apply to others, including AML and KYC checks. So using this technology, the sort of the end goal is, is skipping that process.

And so when you have fewer barriers along the way, then there are fewer intervention points where law enforcement officers and others can crack down on illicit activity, including using funds in ways that could be used to harm women.

REP. PRESSLEY: Right, fewer barriers, fewer intervention points.

I’m particularly concerned by reports where abusers access their partner’s crypto wallet—and if they know the password—and raid the account, preventing their partners from recovering lost funds since crypto transactions are irreversible.

Let me just close here and say that the promise of decentralization may be empowering for some, but for survivors of intimate partner violence, there is often no recourse due to the regulatory gaps in our system.

We cannot allow blockchain tools to become safe havens for abusers and predators. Congress, Congress in the whole, needs to close these gaps.

Protecting survivors of abuse should not be a partisan issue.

And it certainly should not be an afterthought in our digital financial future.

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