The U.S. Treasury Department, led by Deputy Treasury Secretary Wally Adeyemo, is calling on Congress to grant additional authority to address concerns about illegal activity in the cryptocurrency industry. Adeyemo explained that the Ministry had submitted multiple proposals to MPs and emphasized the need for a strong secondary sanctions regime.
Cryptocurrency call attracted attention
Deputy Secretary Adeyemo recently announced that the Treasury Department is pushing for the creation of a secondary sanctions regime. This proposed regime aims not only to exclude a firm from the US financial system, but also to penalize any entity that continues to do business with the sanctioned party. Adeyemo emphasized the importance of preventing groups such as Hamas from finding sanctuary within the digital asset ecosystem.
Acting on concerns expressed by US lawmakers following reports on the use of cryptocurrency by organizations such as Hamas, Deputy Minister Adeyemo emphasized the urgency of preventing the misuse of cryptocurrencies to finance terrorism. The ministry’s recommendations include restricting the use of the US dollar by “dollar-backed stablecoin providers” located outside the US unless they take the necessary counter-terrorism measures.
Ministry of Treasury took action
The Treasury Department is exploring new secondary enforcement tools to effectively combat illegal activity in the cryptocurrency industry. The proposal includes extending the powers granted under the Bank Secrecy Act (BSA) to cryptocurrency assets. In this context, a BSA category is being created that covers “cryptocurrency exchanges, Virtual Asset Service Providers, virtual asset wallet providers, certain blockchain validator nodes and decentralized financial services.”
Deputy Treasury Secretary Wally Adeyemo issued a stern warning about the potential misuse of stablecoins by illicit elements at the Blockchain Association event in Washington. Adeyemo’s warning specifically targeted dollar-based stablecoin companies operating outside the United States, emphasizing that they should not enjoy the privilege of using the US currency without taking measures to prevent terrorist activities. While it did not explicitly name any stablecoins, speculation has emerged that Tether (USDT) may be involved in its concerns.
Call for obstacles for criminal organizations and terrorists
Adeyemo expressed frustration with the cryptocurrency industry’s failure to proactively prevent its use by criminal organizations and terrorists. He highlighted the sector’s clear and present risk to national security, citing examples such as the Binance deal, which was allegedly exploited by terrorists and drug dealers.
In conclusion, Deputy Treasury Secretary Adeyemo emphasized that the cryptocurrency industry should learn from the US banking industry in terms of information sharing. In a clear warning to non-compliant companies that facilitate illegal activities, Adeyemo said the Treasury Department is committed to finding them and holding them accountable for their actions.
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