The U.S Treasury has requested the U.S congress has requested more authority to crack down on the crypto industry.
The department sent recommendations to lawmakers, including the need for new sanction tools prepared remarks from Deputy Treasury Secretary Wally Adeyemo showed.
“We are calling on Congress to create a secondary sanction regime that will not only cut off a firm from the U.S. financial system, but will also expose any firm that continues to do business with the sanctioned entity to being cut off from the U.S. financial system,” Adeyemo said.
“This is a significant tool we do not request lightly. But we need to do everything in our power to make sure that groups like Hamas are not able to find safe haven within the digital asset ecosystem,” he added.
There has been an increasing concern about the illicit use of cryptocurrencies since the Hamas incident. Hamas was found to be using cryptocurrencies to raise funds to sponsor its terrorist activities.
Since then, lawmakers of both Democrat and Republican origin have shown concern on the use of crypto for illicit purposes.
In a bid to contend the possibility of crypto being used for illicit purposes, the treasury is proposing a new crypto related category under the Bank Secrecy Act. According to the treasury statement, decentralized finance (DeFi) platforms claim to be exempted from the BSA, seeking legislation to make DeFi follow the act.
Oversight on Stablecoins
Another concern raised by Adeyemo is on stablecoins, which are cryptocurrencies pegged to fiat currencies such as the USD. He is advocating for legislation to compel dollar-backed stablecoin issuers outside the U.S to block terrorists from using the stablecoins.
“Legislation could explicitly authorize OFAC to exercise extraterritorial jurisdiction over transactions in stablecoins pegged to the USD (or other dollar-denominated transactions) as they generally would over USD transactions,” Treasury said.
Also commenting on the Binance settlement proposed by the Department of Justice (DOJ) about a week ago, Adeyemo said the exchange allowed illicit use of its platform for several nefarious activities, hence the sanction.
“Over several years, Binance allowed itself to be used by the perpetrators of child sexual abuse, illegal narcotics trafficking, and terrorism, across more than 100,000 transactions,” Adeyemo said. “Groups like Hamas, Al Qaeda, and ISIS conducted these transactions.”
A Warning to the Industry
According to Adeyemo, the entire crypto industry needs to be aware that it is not above the law and that it must come under the purview of the law. He sent a warning to the industry, saying the treasury will go after violators
“I want to directly address those within the digital asset industry who believe they are above the law, those that willfully turn a blind eye to the law, and those that promote assets and services that aid criminals, terrorists, and rogue states,” Adeyemo said. “My message is simple: We will find you and hold you accountable.”
To many in the crypto industry, this message spells doom for the industry as it is still under intense crackdown from the securities and exchange commission.
With such threats coming from the Treasury again, it looks like more dark times are coming to the crypto industry in the near future. At this rate, more crypto companies may be getting set to leave the U.S.