Cryptocurrencies used for illicit purposes are a "growing problem," Treasury Secretary Janet Yellen said Wednesday.

Speaking at a financial sector innovation policy roundtable, the former Federal Reserve Chair warned that cyberattacks and digital currency-related crimes were on the rise.

"I see the promise of these new technologies, but I also see the reality: Cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism," she said in her opening remarks.

She referenced the Anti-Money Laundering Act passed into law by Congress last December, a part of the National Defense Authorization Act that requires the U.S. government to update its anti-money laundering/countering the financing of terrorism (AML/CFT) laws. Yellen said the existing regulatory framework was created in the 1970s and has not been updated much since.

"The update couldn’t have come at a better time. As this group knows very well, we’re living amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy," she said.

This is the third time Yellen has spoken in public about crypto this year. During her confirmation hearing in January, she told the Senate Finance Committee that crypto use in terrorism was "a particular concern." In later, written, remarks, she softened her tone, saying cryptocurrencies could be beneficial to the existing financial system as well.

Yellen's remarks come a week after the United Nations published a report saying cryptocurrencies have been used to finance ISIS and Al-Qaeda.

That report referenced law enforcement actions in France and the U.S. Last September, French police arrested 29 individuals accused of facilitating a complicated scheme to fund terrorists using cryptocurrency coupons.

Earlier in the year, the U.S. Department of Justice announced it had dismantled three separate campaigns to finance Al-Qaeda, Hamas and ISIS that used cryptocurrencies.

A different U.N. report said North Korea-linked criminals might be using or stealing cryptocurrencies to fund the nation's nuclear weapons program.

Federal law enforcement officials are also investigating whether or not bitcoin was used to fund domestic terrorism in the U.S., after a now-deceased French blogger sent $522,000 in bitcoin to far-right figures who may have been present at the U.S. Capitol insurrection on Jan. 6.

U.S. lawmakers are also asking whether crypto streaming platform DLive, a subsidiary of BitTorrent and the Tron Foundation, was used to facilitate crypto donations to individuals present at the insurrection.

The Treasury Department, alongside regulatory agencies in its umbrella, "can better stem the flow of dark money," Yellen said on Wednesday.

"And we’ll be better positioned to stop adversaries from hacking our institutions or interfering in our elections," she added.