H2: Treasury Department Cracks Down on Cryptocurrency with Expansion of Powers
The Treasury Department is making a concerted effort to crack down on illicit activity in the crypto space. Deputy Secretary Wally Adeyemo recently addressed industry insiders at a Washington, D.C. policy summit hosted by the Blockchain Association, emphasizing the need for stronger measures to prevent money laundering while maintaining legitimate protections for individuals.
Expansion of Powers
The Treasury Department, through its Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN), is one of the most influential financial institutions in the nation. The Department wields tools such as economic sanctions and know-your-customer provisions to ensure compliance with U.S. laws by global actors. However, the unique system of financial transactions used in the crypto industry has posed challenges to the Treasury’s standard regulatory approach.
New Sanctions and Regulatory Proposals
In response to these challenges, the Treasury Department has taken significant actions to regulate the industry. This includes recent sanctions against a crypto mixer used by the North Korean–linked hacker group Lazarus, and a joint enforcement action against Binance, the leading crypto exchange, for violating the Bank Secrecy Act and sanctions laws.
Adeyemo has also submitted a proposal to the Senate Banking Committee proposing an expansion of the department’s regulatory powers over the crypto industry. This unprecedented proposal aims to establish new categories of financial institutions related to crypto and expand jurisdiction over dollar-backed stablecoins, even those with no U.S. customers.
The Proposal Controversy
The proposal has been met with mixed reactions from industry experts. Some, like Austin Campbell, a former Paxos chief risk officer, have described it as the broadest expansion of powers since the Patriot Act. Others, like Jerry Britto, the executive director of the crypto think tank Coin Center, have expressed concerns that these proposed measures could be counterproductive.
Adeyemo’s Vision for Regulation
A rising star in the Democratic Party, Adeyemo has emphasized the need for robust regulation in the crypto industry. During an interview with TuongVy Le, a former SEC enforcement lawyer, he expressed his firm belief that innovative technology within the industry must be carefully regulated to prevent risks often associated with such innovations.
As Congress continues to debate legislation to regulate stablecoins, the Treasury Department is set on taking measures to prevent illicit activity within the crypto industry. With a dynamic approach to shaping regulations, the Treasury aims to create a safer environment for the use of cryptocurrencies while curbing abuses by illicit actors.
I have been a full-time professional writer for over 10 years, and have written for some of the biggest publications in the world. My work revolves around cryptocurrencies and blockchain technology, and I am widely considered to be one of the leading experts in these fields.I have written two books on the subject matter, and my articles have been featured in major news outlets such as The Wall Street Journal, Forbes, and Huffington Post. In addition to writing, I also give talks and seminars on cryptocurrency investing, and am a regular commentator on CNBC, Bloomberg, and other financial news networks.
