US Treasury Eyes New Sanctions Amid Cryptocurrency Fraud, Following Binance Settlement
Summary:
The US Treasury's Deputy Secretary, Wally Adeyemo, has proposed new sanctions to counter illicit activities in the cryptocurrency space, after a settlement case with Binance. Speaking at the Blockchain Association's Policy Summit, Adeyemo discussed collaboration with the financial sector to combat fraud and terror financing. The Deputy Secretary also hinted at foreign stablecoin providers being targeted by Treasury officials to address vulnerabilities in the financial hub. The comments followed the Treasury's sanctions on crypto mixer Sinbad and Binance's $4.3 billion settlement agreement with US authorities.
The US Treasury's Deputy Secretary, Wally Adeyemo, has revealed that his department is considering new punitive measures to counter fraudulent activities in the cryptocurrency sector. The revelation comes after a recent settlement with Binance, a leading cryptocurrency exchange. In his address during the Blockchain Association's Policy Summit on November 29, Adeyemo stated that Congress has been requested by the Treasury to approve sanctions aimed at completely severing entities from the US financial hub. This action is intended to prevent malicious actors, including terror group Hamas, from exploiting the digital currency ecosystem. Binance's recent settlement with US authorities was cited as an example.
The Deputy Secretary emphasized that Binance had allowed more than 100,000 illicit transactions, involving child abuse, drug trafficking, and terrorism, by groups like Hamas, Al Qaeda, and ISIS over several years. To tackle these emerging threats in the evolving digital asset landscape, Adeyemo stressed the need for government collaboration with the financial industry to share intelligence and strategize against money laundering, fraud, and terror financing.
Moreover, the Deputy Secretary expressed concerns about foreign stablecoin providers, indicating that such entities could be on the Treasury's radar as it works to plug the vulnerabilities.
On the day of Adeyemo's speech, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on crypto mixing service Sinbad, accusing it of laundering funds for the Lazarus Group, a North Korean entity. Furthermore, on November 21, Binance resolved its issues with U.S. authorities, including the Treasury, with a staggering $4.3 billion agreement, leading to the resignation and guilty plea of its ex-CEO, Changpeng Zhao.
Adeyemo asserted that dated statutory definitions are insufficient in dealing with present-day ML/TF risks posed by blockchain technologies, necessitating current regulatory updates. In August, the Treasury had proposed draft regulations to alleviate challenges linked to the reporting and tax payment for cryptocurrency transactions. However, the proposed measures have faced strong criticism due to their impractical nature, especially the broker reporting requirements, anticipated to be operational by 2026.
Published At
11/29/2023 8:10:00 PM
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