HomeCryptoUS Cracks Down on Crypto Firms Over Illicit Finance Concerns

US Cracks Down on Crypto Firms Over Illicit Finance Concerns

Deputy Treasury Secretary Calls for Stricter Measures

In recent developments, the United States has criticized certain firms in the digital asset industry for not doing enough to curb the flow of illicit finance. Deputy Treasury Secretary Wally Adeyemo, speaking in London, highlighted concerns about some entities in the digital asset space pursuing innovation without considering the consequences, especially in protecting against illicit finance.

Adeyemo emphasized the expectation for financial institutions and digital asset companies to take proactive measures to prevent terrorists from accessing resources. He warned that if these entities fail to curb illicit financial activities, the United States and its allies will take action.

Adeyemo’s remarks come in the context of the U.S. government’s efforts to coordinate a crackdown on Hamas, a Palestinian militant group, using parts of the international finance system to bypass sanctions. Recent U.S. sanctions have targeted assets in a Hamas investment portfolio and individuals facilitating sanctions evasion by Hamas-affiliated companies.

Cryptocurrency transactions are often pseudonymous, allowing users to send and receive funds without revealing their identities. However, U.S. Treasury officials highlighted that groups like Hamas can be identified when attempting to convert cryptocurrencies into traditional currencies like the dollar. Identifying these points, even outside the U.S., is a significant focus of their efforts.

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When questioned about the willingness of crypto firms to assist in solving this problem, officials noted that these firms initially claim limited knowledge or control over platform usage. However, their stance tends to change after the U.S. Treasury clarifies that failure to take action may lead to Treasury intervention.

Adeyemo acknowledged that while cryptocurrencies currently do not constitute the primary funding source for terrorist groups, the U.S. is proactively addressing the issue to prevent wider adoption of this technology for illicit finance.

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) recently proposed enhanced transparency measures around cryptocurrency “mixers” to counter their misuse by malicious actors, including Hamas.

Frequently Asked Questions

  • Why is the United States criticizing certain digital asset firms regarding illicit finance?

    The U.S. is concerned about inadequate efforts to curb illicit finance, especially after recent Hamas attacks in Israel.

  • What actions has the U.S. government taken against Hamas-related entities in the context of illicit finance?

    The U.S. issued sanctions disrupting Hamas funding, targeting their investment assets and entities aiding sanctions evasion.

  • How can cryptocurrency transactions be traced to prevent illicit finance, despite their pseudonymous nature?

    Transactions become traceable when cryptocurrencies are converted to traditional currencies; U.S. officials focus on these conversion points globally.

  • Are crypto firms willing to assist in solving the issue of illicit finance?

    Initially hesitant, crypto firms cooperate after U.S. Treasury warnings, clarifying their role in preventing illicit activities.

  • Is cryptocurrency a significant funding source for terrorist groups like Hamas?

    Currently not primary, but the U.S. acts preemptively to prevent wider adoption of illicit finance by terrorist groups.

  • What measures has the U.S. Treasury proposed to combat the misuse of cryptocurrency “mixers” by malicious actors?

    U.S. Treasury’s FinCEN proposed increased transparency around cryptocurrency “mixers” to thwart misuse by entities like Hamas.

  • What consequences will digital asset firms face if they fail to prevent illicit financial flows?

    Firms failing to prevent terrorist access to funds will face action from the U.S. and its allies to curb illicit financial activities.

Ricardo Anderson
Ricardo Anderson
Ricardo is someone with whom you can ask and talk about finance and its importance in life. A part-time cook, enthusiast, and football player, he loves to read and write on the latest updates in finance.


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