US Treasury targets ‘crypto risk to national security’

Deputy Secretary of the Treasury Wally Adeyemo is speaking before the Senate Committee on Banking, Housing, and Urban Affairs about “various threats to our national security,” and the prepared statements specifically highlight concerns about bad actors “using cryptocurrencies to try and circumvent our sanctions.” 

The US Treasury is insisting that it “needs additional tools to protect the American people.” 

The Treasury specifically highlights a “bitcoin money laundering network,” which it claims was operated years ago by al-Qaeda, as well as transactions between the Islamic Revolutionary Guard Corps-Qods Force, Hamas, and the Palestinian Islamic Jihad.

The statement additionally highlights state-level actors, naming both the Democratic People’s Republic of Korea (DPRK) and Russia. 

There is only one crypto firm highlighted by name in the prepared statement: Tether. The statement notes that Russia increasingly relies on USDT “to try to circumvent our sanctions and continue to finance its war machine.”

Protos has reached out to Tether for comment on its inclusion in these statements and will update if we hear back.

Read more: Tether: Ten years, 100,000,000,000 USDT, and still no audit

Adeyemo’s prepared statement highlights reforms specifically meant to deal with jurisdictional risk for ‘offshore’ crypto platforms and the introduction of a new secondary sanctions tool that would target ‘foreign digital asset providers that facilitate illicit finance.’

The need for these was initially highlighted back in November, and at the time Adeyemo stated that “a regulatory environment that stops terrorists, criminal organizations, and rogue states from using virtual currencies to move their assets can also help legitimate firms thrive in the long term.”

Several crypto bills have been proposed over the past few years in both the House and the Senate, though it seems unlikely that any bills will manage to pass in the political gridlock leading up to the next election.

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