Dec.1, 2017 (The Ferowich Report)—As Congress prepares to update anti-money laundering and terrorist financing laws, the US Department of Homeland Security testified this week that agents “are increasingly encountering virtual currency, including more recently, anonymity enhancing cryptocurrencies.”

Privacy coins are “increasingly preferred by TCOs [transnational criminal organizations,”, Matthew Allen, the assistant director of investigative programs at DHS, said November 28.

“Some illicit virtual currency exchangers have also begun to cater to TCO actors, including through the use of ‘mixers’ or ‘tumblers’ that anonymize virtual currency addresses and transactions by weaving together inflows and outflows from different users,” Allen said, “further increasing the challenge to law enforcement’s ability to tie virtual currency transactions to real world individuals.”

Monero (XMR), Zcash (ZEC), Zcoin (XZC) are a few examples of cryptocurrencies focusing on privacy, while Dash (DASH) specifically gives users an option to increase anonymity with mixing.

Why it matters: The more Congress and government agencies seek to clampdown on blockchain innovations the less attractive the United States will become in the eyes of cryptocurrencies who may want to do business there.

The obvious: The U.S. government’s massive data collection and surveillance programs helped create a market for more privacy. More battles between governments and technologists are likely on the horizon.