US Treasury seeks more sanctions powers against crypto exchanges

The U.S. Treasury Department is asking politicians to give it more enforcement authority to crack down on foreign institutions that provide crypto services as part of its goal to protect national security. “Our problem is that more and more people are finding ways to use virtual currencies to hide their identities and move resources,” said U.S. Treasury Undersecretary Adewale O. Adeyemo in written testimony ahead of a Senate hearing on Tuesday. “Malicious actors, like terrorists, are always looking for new ways to move their resources in response to our actions to cut off their access to the traditional financial system.” Adeyemo said that over the past year, Iran’s Quds Force, part of the Islamic Revolutionary Guard Corps, has sent cryptocurrencies to armed groups such as Hamas and the Palestinian Islamic Jihad in the Gaza Strip. He added that the U.S. Treasury has taken action against networks that provide small donations to Hamas. Adeyem is seeking lawmaker approval for a secondary sanctions tool targeting foreign digital asset providers to combat illicit financing activities. He said: "The new secondary sanctions tool will help the Treasury improve its targeting capabilities and address the challenges posed by technological developments that make tools that are extremely effective in traditional payment environments less effective when combating virtual currencies." The U.S. Treasury also wants to explicitly expand its jurisdiction to cover key digital asset players such as cryptocurrency exchanges. The U.S. Treasury also asked for the authority to crack down on cryptocurrency platforms when they exploit the U.S. financial system to undermine U.S. national security. (Bloomberg)