Deputy Treasury Secretary of the United States, Adewale Adeyemo, emphasized the need for expanded authority for his department during an appearance before the Senate Banking Committee on April 9. At a hearing focused on thwarting illicit finance, terrorism funding, and sanctions evasion using cryptocurrencies, Adeyemo presented three suggested reforms to strengthen U.S. enforcement actions against international wrongdoers.
In his recent hearing, Adeyemo referred to three proposed modifications from the Treasury Department in November. These adjustments aim to impose penalties on “foreign suppliers of digital assets” suspected of facilitating illegal financing activities.
U.S. sanctions prevent institutions from utilizing American correspondent accounts and banking transactions, according to Adeyemo. However, crypto exchanges and money transfer services don’t necessarily require correspondent accounts for their operations. Therefore, a new method of imposing secondary sanctions is required.
“We can clarify that our authorities can reach extraterritorially when digital asset entities harm our national security while taking advantage of our financial system.”
Adeyemo did not elaborate on the form the new secondary sanctions might take.
The second proposed change by the Treasury aims to broaden the regulatory scope of current bodies to cover the digital asset market. Additionally, Adeyemo highlighted the need to tackle jurisdictional risks associated with offshore cryptocurrency platforms as a significant issue.
“There is clear overlap between these proposals and the bills coming out of this Committee.”
Adeyemo’s comments implied that Elizabeth Warren and Sherrod Brown, two members of the committee, were behind the Digital Asset Anti-Money Laundering Act of 2022 introduced in this congress. Notably, Warren and Brown are known for their critical views towards cryptocurrencies.
Adeyemo highlighted three areas where crypto is used by terrorist groups, North Korea, and in the illicit fentanyl trade, serving as proof for the need of expanded enforcement authorities at the Treasury. He acknowledged that terrorists generally prefer traditional financial methods, but warned ominously, “Without Congress granting us additional powers, our concern is that the employment of virtual assets by these entities will escalate.”
Banking Committee chair Sherrod Brown released a statement supporting the Treasury Department’s enforcement goals ahead of Adeyemo’s testimony. Ranking member Tim Scott praised the work the Treasury Department has done, but concentrated on foreign policy issues that he believes threaten U.S. security.
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2024-04-10 00:33