US Urges Crypto Asset Firms To Intensify Efforts Against Illicit Financing

Amid the ongoing global crackdown on financial crimes and terrorism funding, the US government recently highlighted concerns regarding the alleged inadequate efforts of some companies operating in the crypto asset space.

The US government particularly points to the potential role of digital assets in facilitating illicit financial transactions, urging companies to take proactive steps in curbing such activities.

Illicit Finance In The Digital Realm? 

While addressing an audience in London, US Deputy Treasury Secretary Wally Adeyemo emphasized that most financial institutions share an interest in eliminating terrorist financing. This collaborative spirit, however, doesn’t spread to “all sectors equally.”

Adeyemo pointedly noted concerns regarding certain players in the digital asset industry. According to the US Deputy Treasury Secretary, driven by innovation, these entities often “overlook the consequential responsibilities, notably in guarding against illicit finance.” Adeyemo stated:

Our expectation is that financial institutions and digital asset companies and others in the virtual currency ecosystem take steps to prevent terrorists from being able to access resources.

The US Deputy Treasury Secretary further warned that if these entities do “not proactively address these concerns,” the United States would take necessary actions in collaboration with its global partners, noting:

If they do not act to prevent illicit financial flows, the United States and our partners will.

However, the US government official failed to provide a name of the companies non-compliant with their standards.

Crypto And Illicit Finance: A Preemptive Stance?

While crypto and other digital assets are not currently the major primary sources of funding for terrorist groups and entities looking to cloak their financial dealings, according to Adeyemo, the potential for misuse remains.

Adeyemo’s remarks come against the backdrop of recent events in Israel, renewing the global focus on illicit funding sources by mainstream media. In the crypto space, efforts have uncovered the myths surrounding crypto and illegal organizations. 

The community has organized to call out the Wall Street Journal and other media outlets trying to target cryptocurrency as an alleged source of financial support for terrorist groups. Castle Island Ventures founder Nic Carter offered a reward for users willing to test their blockchain analytics skills:

As reported by Bitcoinist, the terrorist group Hamas saw a decline in their global donations campaigns after they stopped accepting BTC in 2022. The connection between illegal activities and crypto has weakened due to the transparency of these assets. 

Sam Lyman, Director of Public Policy for Bitcoin mining company Riot, further addressed this matter. Lyman mentioned that the mainstream media didn’t capture the nuances indicating Bitcoin and other cryptocurrencies might hinder, not help, terrorist groups.

The global crypto market cap value on TradingView
The global crypto market cap value on the 1-day chart. Source: Crypto TOTAL Market Cap on TradingView.com

Featured image from Unsplash, Chart from TradingView

Source: https://bitcoinist.com/us-urges-crypto-asset-firms-to-intensify-efforts/