US Treasury Warns of Rising Cryptocurrency Use in Illicit Activities
The US Department of the Treasury has released its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. The reports highlight the growing use of cryptocurrencies by criminals and illicit entities, posing significant threats to the United States in terms of illicit finance. The Treasury warns that malicious actors are exploiting various channels, including cash and cryptocurrencies, to carry out fraud, drug trafficking, human smuggling, and corruption. Money laundering remains a critical concern, with criminals using techniques such as fraud, cybercrime, and corruption to move illicit proceeds. The Treasury is particularly concerned about the increasing use of cryptocurrencies for money laundering.
US Treasury Sounds Alarm on Non-Compliance and Emerging Risks in Digital Finance
The Treasury also highlights non-compliance among Virtual Asset Service Providers (VASPs), which facilitate exchanges between virtual assets and fiat currencies. Many VASPs either claim exemption from regulatory rules or fail to register adequately. The Treasury emphasizes the need for Decentralized Finance (DeFi) services to adhere to Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations. It also raises concerns about the online gaming industry becoming a new avenue for money laundering due to its anonymity and vast scale. Additionally, terrorist networks are turning to virtual assets for money transfers, with a growing demand for stablecoins.
Hot Take: US Treasury Department Highlights Increasing Use of Crypto by Criminals in 2024
The US Department of the Treasury has released its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, warning about the rising utilization of cryptocurrencies by criminals and illicit entities. These reports highlight the mounting threats associated with illicit financing within the United States and emphasize the need for stronger regulation and compliance in digital finance. The Treasury is particularly concerned about the use of cryptocurrencies for money laundering and terrorist financing. To address these concerns, the Treasury plans to unveil a strategic plan with detailed recommendations in the coming weeks. This proactive approach aims to prevent abuse within the digital finance industry and protect against emerging risks.
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