Illicit Transactions via Crypto a Threat to U.S. National Security
US Treasury emphasized recent recommendations to U.S. lawmakers to expand authorities and resources for combating illicit actors in the digital asset space
In a recent speech, Deputy Treasury Secretary Wally Adeyemo underscored the critical need for digital asset firms to take decisive action against illegal transactions that pose a threat to the national security of the United States. Adeyemo expressed concern over the failure of numerous crypto companies to prevent organizations, terrorists, and rogue states from exploiting their platforms for illicit activities.
Addressing the Blockchain Association’s Policy Summit, Adeyemo highlighted the risk posed by the inaction of both large and small firms in the crypto industry, emphasizing that it represents a clear and present danger to national security. He issued a stern warning to those aiding in the violation of anti-money laundering and terrorist financing laws, asserting that the Treasury will actively pursue and hold them accountable.
Adeyemo also outlined the steps proposed by the Biden Administration to mitigate these risks. He referenced plans by traditional U.S. financial institutions to establish a new information sharing exchange, managed by the American Bankers Association, aimed at preventing fraud, money laundering, and terrorist financing. Adeyemo urged the digital asset industry to follow suit, emphasizing its capacity to develop tools that prevent money laundering while maintaining legitimate protections for individuals.
Furthermore, he emphasized recent recommendations to U.S. lawmakers to expand authorities and resources for combating illicit actors in the digital asset space. This includes the creation of new sanctions tools targeting crypto companies enabling terrorist groups and other bad actors to move their assets. The proposed secondary sanction regime would not only sever ties between a crypto firm and the U.S. financial system but also extend consequences to entities continuing business with the sanctioned party.
Adeyemo also called for updated illicit finance authorities tailored to the evolving digital asset ecosystem, emphasizing the need to address challenges posed by dollar-backed stable coin providers outside the United States. As the Biden Administration seeks to bolster regulatory measures, the speech signals a renewed commitment to safeguarding the national security interests of the United States in the rapidly evolving landscape of digital assets.
