U.S. Deputy Treasury Secretary Wally Adeyemo is issuing a warning to the crypto industry, saying it must crack down on illicit finance.
Speaking at the 2023 Blockchain Association Policy Summit, Adeyemo says that the digital assets industry should self-regulate against illegal financial activities or regulators will have to clamp down even harder on the nascent sector.
“[The crypto industry has] the capacity to build new tools that help prevent money laundering while continuing to provide legitimate protections to individuals. You also have the capacity to cut off firms from your ecosystem that are failing to take steps to prevent illicit finance.
Without action by your industry, increased movement of illicit proceeds into the digital asset ecosystem will force us to restrict, restrain, and cut off elements of the digital asset ecosystem from the broader economy. Our actions over the last year send a clear message: we will not hesitate to bring to bear tools across [the] government to protect our national security.”
Recently, the Treasury Department provided Congress with recommendations on how to better combat bad actors within the crypto industry.
The first is the creation of new sanctioning tools that would allow regulators to stifle the movements of crypto assets owned by terrorist organizations.
Secondly, the Treasury is asking regulatory agencies to update their terms as many of them are outdated when applied to virtual currencies.
Lastly, the Treasury Department wants to quell offshore financial providers that are helping bad actors skirt US law by teaming up with the Financial Action Task Force (FATF).
“These reforms will not only help us curb illicit finances, but they will also level the playing field for the actors pursuing responsible and beneficial innovation and facilitate sustainable growth for the industry.”
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