US Warns Crypto Firms: Crack Down on Illicit Finance or Exit US Market

• The U.S. government has issued a stern warning to cryptocurrency companies, stating that they could face a ban from the U.S. market. 
• New legislation from Congress has been requested to grant the Treasury the authority to police crypto marketplaces.
• Binance was described as a tool “used by the perpetrators of child sexual abuse, illegal narcotics trafficking, and terrorism.”

The U.S. government claimed that they would ban cryptocurrency companies from the U.S. economy and market if they failed to report and block illicit money flows. 

Deputy Treasury Secretary Wally Adeyemo stated that crypto companies need to increase their efforts to curtail the flow of illicit finance. Moreover, Adeyemo added that the lack of action across the crypto sector could potentially present a risk to the U.S.

Adeyemo stated his opinion at an event hosted by the Blockchain Association, where he shared that the U.S. government’s actions over the last year “send a clear message.” Adeyemo said, “We will not hesitate to bring to bear tools across government to protect our national security.”

Additionally, the deputy Treasury Secretary mentioned that the Biden administration requested new legislation in a letter to Congress. The proposed legislation would grant the Treasury authority to police crypto marketplaces, which are used by people whom the U.S. government sees as illicit. 

A sanction regime that will cut off a firm from the U.S. financial system is requested by Congress, according to Adeyemo. He said:

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 US financial system.

Furthermore, Adeyemo highlighted the importance of focusing on actions to prevent bad actors from using the digital asset ecosystem for illicit activity. Addressing those who prompt assets and services that aid criminals, Adeyemo said, “We will find you and hold you accountable.” 

As an example, Adeyemo described Binance as a tool “used by the perpetrators of child sexual abuse, illegal narcotics trafficking, and terrorism, across more than 100,000 transactions.”