U.S. Treasury Lobbies for More Authority in Crypto Crackdown

• The U.S. Treasury has asked for more authority in crypto crackdown.
• The Treasury asked for new enforcement tools.
• The department also requested Congress to revise old statutory definitions.

The U.S. Department of Treasury is lobbying senior lawmakers with a proposal to expand its authority in the war against crypto crimes.

The calls come after the Department’s Office of Foreign Assets Control (OFAC) and other agencies announced the largest settlement in history with the world’s leading crypto exchange by trade volume, Binance, on November 21.

In a speech delivered at the 2023 Blockchain Association’s Policy Summit on November 29, Deputy Secretary of the Treasury Wally Adeyemo proposed several steps that “must” be taken to curb the use of crypto assets in illicit activities, following what he termed “the lack of action by too many firms.”

Particularly, Adeyemo asserted that illicit activities in the crypto industry threaten U.S. national security and that the Treasury wouldn’t hesitate to “bring to bear tools across government” to address the challenge.

“Yesterday, Treasury provided Congress a set of common-sense recommendations to expand our authorities and broaden our tools and resources to go after illicit actors in the digital asset space,” Adeyemo stated.

The Deputy Secretary revealed that the Treasury’s pursuit includes creating new sanction tools for crypto-native companies that enable terrorist groups and other illicit actors to move their digital assets.

According to Adeyemo, such tools would cut off firms that facilitate illicit crypto activities from the U.S. financial system and expose businesses that continue to trade with the sanctioned firms to similar enforcement actions.

“This is a significant tool we do not request lightly. But we need to do everything in our power to make sure that groups like Hamas are not able to find safe haven within the digital asset ecosystem,” Adeyemo remarked.

Further, the Deputy Secretary sent a message to non-U.S. entities that issue dollar-backed stablecoins.

Stablecoin Issuers Put on Notice

Adeyemo noted that the U.S. needs to update its illicit finance authorities to match modern challenges, such as those presented by the rapidly evolving crypto ecosystem.

Calling on revising old statutory definitions, Adeyemo asserted that the Treasury couldn’t continue allowing dollar-backed stablecoin issuers outside the U.S. to leverage the privilege of using the nation’s currency without enacting adequate measures to curb crypto-funded terrorism.

Per Adeyemo, without action by the industry, the continued movement of illicit proceeds into the digital asset ecosystem would ultimately drive the Treasury to “restrict, restrain, and cut off” elements of crypto from the broader economy.

Read why the U.S. Treasury wants to impose authority on crypto-funded terrorism:
U.S. Treasury to Impose Authority on Crypto-Funded Terrorism

Stay updated on what U.S. lawmakers want President Biden to do about crypto-funded terrorism:
U.S. Lawmakers Press Biden to Combat Crypto-Funded Terrorism