KEY POINTS
Adewale Adeyemo, the U.S. Deputy Treasury Secretary, recently emphasized the need for stronger regulatory powers during his presentation to the Senate Banking Committee on April 9.
Addressing the challenges of combating illicit finance, terrorism, and sanction dodging, he proposed a trio of enhancements to bolster the nation’s defense against global malefactors exploiting cryptocurrencies.
Amendments Aimed at Strengthening Control Over Crypto-Related Crime
Building on earlier suggestions from the Treasury Department in November, Adeyemo’s fresh testimony highlighted three amendments aimed at tightening the reins on foreign digital asset providers that facilitate illegal financial activities.
Adeyemo pointed out that while U.S. sanctions restrict the use of American correspondent accounts and banking transactions, cryptocurrency exchanges and monetary services often bypass these traditional financial pathways.
The second amendment seeks to amplify the reach of “existing authorities” within the digital asset sphere. The third focuses on mitigating risks associated with offshore crypto platforms, which Adeyemo identified as a significant obstacle.
Lack of Legislative Support Will Likely Fuel Terrorist Organizations Activities
Part of his reference was to the Digital Asset Anti-Money Laundering Act of 2022, reintroduced by committee members Elizabeth Warren and Sherrod Brown, both known for their critical stance on cryptocurrencies. Adeyemo cited the adoption of cryptocurrencies by terrorist organizations, North Korea, and the fentanyl trade as clear indicators of the Treasury’s urgent need for enhanced enforcement capabilities.
While acknowledging that terrorists still show a preference for conventional financial channels, he warned that without legislative support to equip the Treasury with robust tools, the reliance on virtual assets by these entities is likely to escalate. Meanwhile, Ranking Member Tim Scott commended the Treasury’s accomplishments but shifted focus to external policy concerns that he deems a threat to national security.
