The Treasury Department Plans to Designate Crypto Mixers as Money-Laundering Hubs
The Treasury Department is set to designate international crypto mixers as hubs for money laundering, citing their use by terrorist groups like Hamas, according to The Wall Street Journal. This designation will impose sanctions and require specific reporting for financial transactions.
Deputy Treasury Secretary Wally Adeyemo emphasized the department’s commitment to combatting illicit use of convertible virtual currency (CVC) mixing by various actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups such as Hamas and Palestinian Islamic Jihad.
Senators, including Elizabeth Warren, expressed concern about how Hamas raised millions of dollars through crypto. They urged the Biden administration to take action against illicit crypto activity to protect national security.
Treasury Department’s Response and Recent Report on Hamas’ Use of Crypto
The Treasury Department has not yet responded to requests for comment regarding this designation. The decision comes after a report from the WSJ highlighted the use of crypto by Hamas and other militant groups as a financing tool for attacks in Israel.
Warren’s Op-Ed on Regulating Decentralized Finance Companies
Following the letter sent to the Biden administration, Elizabeth Warren and Senator Roger Marshall published an op-ed in the WSJ calling for decentralized finance companies to be subject to anti-money laundering rules like banks.
Criticism and Regulation of Crypto
Yaya Fanusie, director of anti-money laundering at the Crypto Council for Innovation, argued that crypto is already regulated in the US and follows anti-money laundering rules. Exchanges and financial intermediaries are classified as money service businesses (MSBs) under BSA regulations and are required to register with FinCEN.
Chainalysis cautioned against overstating the use of crypto by terrorist groups, stating that traditional fiat-based methods remain their primary financing vehicles.
Hot Take: The Treasury Department Takes Action Against Crypto Mixers
The Treasury Department’s move to designate international crypto mixers as money-laundering hubs demonstrates its commitment to combatting illicit activities in the cryptocurrency space. By imposing sanctions and requiring reporting for financial transactions, the department aims to prevent terrorist groups like Hamas from using crypto to finance their operations. This action comes in response to concerns raised by lawmakers about the use of crypto by these groups. However, there is ongoing debate about the need for additional regulation, with some arguing that existing anti-money laundering rules already apply to the crypto industry.
By
By
By
By
By
By