US Deputy Treasury Secretary Wally Adeyemo is warning the crypto industry and saying it must crack down on illegal financing.
Speaking at the 2023 Blockchain Association Policy Summit, Adeyemo said the digital asset industry must self-regulate against illicit financial activities or regulators will have to crack down even harder on the emerging sector.
“[The crypto industry has] the ability to develop new tools that help prevent money laundering while continuing to provide legitimate protection to individuals. You also have the ability to exclude companies from your ecosystem that fail to take steps to prevent illegal financing.
Without action from your industry, the increasing movement of illicit proceeds into the digital asset ecosystem will force us to limit, rein in and cut off elements of the digital asset ecosystem from the broader economy. Our actions over the past year send a clear message: we will not hesitate to use instruments [the] government to protect our national security.”
Recently, the Treasury Department made recommendations to Congress on how to better combat bad actors within the crypto industry.
The first is to create new sanctions tools that allow regulators to suppress the movements of crypto assets owned by terrorist organizations.
Secondly, the Ministry of Finance is asking regulators to update their terms as many of them are outdated when applied to virtual currencies.
Finally, the Treasury Department wants to clamp down on offshore financial services firms that help bad actors evade U.S. law by working with the Financial Action Task Force (FATF).
“These reforms will not only help us curb illicit finance, but they will also create a level playing field for actors pursuing responsible and beneficial innovation and facilitating sustainable growth for the industry.”
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Featured image: Shutterstock/Natalia Siiatovskaia/Brita Seifert