US Treasury Urges Stricter Controls on Crypto Crime Now Amid Rising Concerns

WASHINGTON, Tuesday, April 23, 2024- A senior U.S. Treasury Department official called for stricter regulations to combat illicit activity within the cryptocurrency sector during a Senate Banking Committee hearing on April 9, 2024. ¹

The excerpts from the Treasury’s proposals can be seen here.

The Senate Banking Committee is expected to consider legislation addressing cryptocurrency regulation in the coming months.

Deputy Treasury Secretary Adewale Adeyemo outlined three key proposals aimed at strengthening enforcement efforts against international actors using cryptocurrency for criminal purposes. ²

The call comes in the wake of terrorist groups and other malicious actors are increasingly turning to cryptocurrencies to bypass sanctions and finance their activities.

These proposed authorities would have to give the Treasury Department powers to target foreign digital asset providers that knowingly facilitate illicit finance.

Treasury’s proposals include expanding secondary sanctions which would authorize the U.S. government to target foreign “digital asset providers”, who knowingly facilitate transactions linked to terrorism or other illicit activities, even if those providers are not located in the United States.

In addition, the Treasury also seeks broader enforcement authority Adeyemo called for legislation granting the Treasury Department greater authority to monitor and investigate suspicious activity within the cryptocurrency ecosystem.

He emphasized the need for international cooperation to address the challenge of offshore cryptocurrency platforms that may be used by criminals to evade regulations.

Adeyemo’s proposals align with concerns raised by some members of the Senate Banking Committee. Committee Chair Sherrod Brown (D-OH) and Senator Elizabeth Warren (D-MA) have previously advocated for stricter regulations on cryptocurrency to combat money laundering and financial crime.

Adeyemo’s testimony highlights the ongoing debate over how to balance the potential benefits of cryptocurrency with the need to mitigate its risks and ensure it doesn’t become a haven for criminal activity, analysts said.

1. Crypto Crime: https://www.wsj.com/livecoverage/stock-market-today-dow-jones-04-09-2024/card/treasury-asks-senate-for-new-powers-to-curb-crypto-crime-financing-fQIsieqcDMV7Pp9VPxFj[↩]
2. Crypto Crime: https://www.youtube.com/watch?v=45DIvWIXtZc[↩]