The U.S. Treasury Department Seeks More Authority in the Crypto Industry
The U.S. Treasury Department is requesting additional power from Congress to crack down on illicit actors in the digital asset industry, according to Deputy Treasury Secretary Wally Adeyemo. The Treasury Department has sent recommendations to lawmakers, including the creation of new sanctions tools. Adeyemo emphasized the need for a secondary sanction regime that would not only cut off a firm from the U.S. financial system but also expose any firm doing business with a sanctioned entity to the same consequences. The goal is to prevent groups like Hamas from finding refuge within the digital asset ecosystem.
Crypto’s Role in Financing Terrorism
The use of cryptocurrencies in financing terrorism has been a prominent topic of discussion in Washington, particularly regarding Hamas’s fundraising efforts. Both Republicans and Democrats have expressed concerns about crypto’s role in supporting terrorism and have urged federal prosecutors to investigate platforms like Binance and Tether for potential involvement in providing resources to terrorist groups.
Regulating Dollar-Backed Stablecoin Providers
Adeyemo also highlighted the importance of ensuring that dollar-backed stablecoin providers outside the U.S. implement procedures to prevent terrorists from exploiting their platforms. He emphasized that these providers should not be able to utilize U.S. currency without appropriate safeguards.
Track Records: Binance Settlement and Criminal Activity
Adeyemo’s remarks come after the U.S. Department of Justice recently reached a settlement with Binance, imposing a $4.3 billion fine on the exchange for alleged money laundering, fraud, and sanctions violations. Adeyemo stated that Binance had facilitated illegal activities, including child sexual abuse, narcotics trafficking, and terrorism-related transactions.
A Warning to the Crypto Industry
In his prepared remarks, Adeyemo had a strong message for the digital asset industry, stating that those who believe they are above the law or promote assets and services aiding criminals, terrorists, and rogue states will be held accountable. He emphasized the Treasury Department’s commitment to finding and taking action against such individuals.
North Korea Sanctions
The Treasury’s Office of Foreign Assets Control announced sanctions against Sinbad.io, a virtual currency mixer used by the Democratic People’s of Korea to launder stolen cryptocurrencies. Adeyemo stated that the Treasury Department is prepared to utilize all available tools to prevent virtual currency mixers from facilitating illicit activities.
Hot Take: Strengthening Regulatory Measures in the Crypto Industry
The U.S. Treasury Department’s call for increased authority reflects the growing concerns over illicit activities and terrorism financing in the digital asset space. By seeking new sanctions tools and stricter regulations for stablecoin providers, the government aims to protect the integrity of the financial system. The recent Binance settlement and sanctions against Sinbad.io highlight the enforcement actions being taken against platforms involved in criminal activities. This move sends a clear message to the crypto industry that compliance with regulations is essential, and those who facilitate illegal transactions will face severe consequences.
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