US Treasury seeks secondary sanctions tool to go after crypto exchanges

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The U.S. Treasury is advocating for expanded powers to prevent crypto misappropriation by Iran, Russia, and North Korea.

Based on Bloomberg’s report, Deputy Secretary Adewemo highlighted in his prepared statement for the Senate hearing that the administration is dealing with threats from malicious entities who are becoming more cunning at concealing their identities and transferring funds through virtual currencies.

Adeyemo emphasized that terrorist organizations and similar entities are finding innovative methods to transfer funds due to restrictions on their use of conventional financial systems. Last year, Iran’s Quds Force, a military branch, reportedly used cryptocurrencies to financially support militant groups like Hamas and the Palestinian Islamic Jihad in Gaza. Furthermore, he brought up that other countries, such as North Korea and Russia, are also adopting crypto as a means to bypass financial sanctions.

“Introducing a fresh approach with secondary penalties would enable the Treasury to adapt its aiming abilities. This would take into consideration the technological advancements making once powerful payment methods less viable against virtual currencies.”

Adewale O. Adeyemo

The US Treasury intends to use a tool called secondary sanctions to address potential security risks posed by overseas cryptocurrency exchanges. However, the details of this tool are not yet clear. Essentially, the goal is to restrict these exchanges from using the American financial system.

According to crypto.news’ previous article, US investigators are examining over $20 billion worth of transactions conducted on the allegedly sanctioned crypto exchange, Garantex. These transactions utilized Tether (USDT) as a means of exchange, leading to suspicions of potential violation of Russia-related sanctions. Yet, it is unclear if the US Treasury plans to impose further sanctions against Garantex’s partners in response.

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2024-04-09 11:51