U.S. Deputy Treasury Secretary Adewale O. Adeyemo has called on Congress to take steps to provide the government with the “necessary tools” to combat illicit finance involving cryptocurrencies.
Adeyemo's written statement said that terrorist groups have been trying to exploit cryptocurrencies over the past few years. testimony Ahead of a Senate Banking, Housing and Urban Affairs Committee hearing scheduled for Tuesday.
“For example, five years ago, Al Qaeda and its affiliated terrorist groups, primarily based in Syria, operated a Bitcoin money laundering network that used social media platforms to solicit donations of cryptocurrencies,” he said. It pointed out.
Adeyemo went on to say that one of the agency's bottlenecks lies in the fact that bad actors are “increasingly finding ways to hide their identities and move resources using virtual currencies.”
Existing approaches to combating terrorist financing through the traditional financial system have effectively made it difficult for authorities to move funds for terrorist groups. But “the more effective our targeting is, the more reason these terrorist groups have to look into virtual assets,” Adeyemo said.
He added that Russia is also increasingly turning to alternative payment mechanisms, including stablecoins, “to try to circumvent our sanctions and continue to fund our war machine.”
In December, a bipartisan group of U.S. senators submitted a bill That would expand the Treasury Department's sanctions powers to target more terrorist groups, including Hamas, and give it more resources to deal with cryptocurrencies.
The proposal includes three reforms.
Adeyemo noted that the Ministry of Finance sent a proposal to the committee in November in hopes of strengthening the government's counterterrorism financing authority.
In his testimony, he explained that the proposal broadly covers three reforms: introducing secondary sanctions tools, modernizing existing authorities and closing gaps, and addressing jurisdictional risks posed by offshore crypto platforms. .
Currently, the Treasury Department has the authority to ban U.S. correspondent accounts and transaction processing by foreign financial institutions that engage in suspicious activity. “However, unlike banks, foreign crypto exchanges and some money service companies do not have or rely on correspondent accounts for all transactions,” Adeyemo said. It added that new secondary sanctions tools will help evolve Treasury's targeting capabilities.
“We continue to assess terrorists’ preference for using traditional financial products and services, but without Congressional action to provide the necessary tools, terrorists’ use of virtual assets will increase. “I'm concerned that it's going to be one side,” he continued.
Disclaimer: The Block is an independent media outlet that delivers news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block remains independently operated to provide objective, impactful, and timely information about the cryptocurrency industry. Current financial disclosure information is as follows:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
