US Treasury demands more control over foreign crypto exchanges

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The U.S. Treasury Department aims to broaden its authority to monitor and regulate cryptocurrency companies, both domestic and international.

Prior to the Senate hearing, Deputy Secretary of State Adeyemo warned that deceitful individuals are continually devising innovative methods to conceal their identities and transfer funds.

Adeyemo pointed out that terrorist organizations and nations under American sanctions, such as Russia and North Korea, have employed cryptocurrencies for financing their activities.

If our targeting efforts have proven successful, it means terrorist organizations may feel compelled to explore virtual assets as an alternative. It’s important to note that this is not a problem exclusive to terrorist groups; state actors like North Korea and Russia are also known to engage in such activities.

Adewale O. Adeyemo, Deputy Secretary of the Treasury

Adeyemo expresses optimism that legislators will agree to allow the use of penalties against foreign digital asset providers who enable prohibited financial transactions.

“Although terrorists mostly rely on conventional financial methods at present, there’s a risk that their usage of virtual assets will expand significantly if Congress doesn’t grant us the necessary powers.”

Adewale O. Adeyemo, Deputy Secretary of the Treasury

The U.S. Treasury has asked for these cryptocurrency platforms based outside of the country to face legal action if they pose a threat to American security by misusing the US financial system.

Criminal interest in cryptocurrencies is on the rise, prompting authorities worldwide to take measures against illicit transactions. In October 2023, a report by The Wall Street Journal revealed that Palestinian militants had amassed at least $134 million in digital assets. This revelation sparked outrage among American lawmakers who urged the Justice Department to intervene, specifically naming Binance and Tether as potential culprits.

Expert analysts at Chainalysis warn against mistakenly categorizing funds from third parties that have transacted with criminals as terrorist-related cryptocurrencies. These funds may have merely interacted with the criminal element during financial transactions, but not necessarily been the original source or intended destination of funds linked to terrorism.

Elliptic made a note that the media, specifically the Wall Street Journal, may have overexaggerated the extent of terrorist group financing in cryptocurrencies. The data presented about Hamas’ cryptocurrency collections, according to Elliptic and their analytics team, requires more precision and accuracy.

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2024-04-09 19:34