Biden’s Treasury Sounds Alarm on Digital Assets and Terrorism, Calls for Regulation

Deputy Treasury Secretary Wally Adeyemo is raising a red flag and calling on Congress to grant greater authority in the fight against the improper use of digital assets. Recent events, including the bold attack by Hamas on Israel on October 7, have brought the hidden side of crypto financing into sharp focus.

Adeyemo’s message is clear: it’s time for the cryptocurrency world to step up, regulate itself, and protect against the wrongful use of its assets. The stakes are high, and the situation demands our attention.

A Plea for Congress Action

Adeyemo emphasizes the need for Congress to tackle this pressing issue and shares that discussions are ongoing with members from both the Democratic and Republican parties. He acknowledges the Treasury Department’s identification of international “mixers” (crypto exchanges that offer anonymity) as hotspots for money laundering, particularly in cases involving groups like Hamas and Palestinian Islamic Jihad. Adeyemo insists that we need additional measures, both from the government and the cryptocurrency industry itself.

Read More: National Security In Question: SEC’s Crypto Approach Sparks Concern in Congress

Taking Matters in Our Own Hands

He urges the cryptocurrency industry to take responsibility and engage in self-regulation to prevent the potential misuse of their assets for criminal purposes. Adeyemo assures that the Treasury Department will continue its efforts and work alongside lawmakers to encourage responsible innovation within the cryptocurrency sector.

Over 100 legislators have sought information from the Treasury Department regarding the use of cryptocurrency by terrorist groups and potential legislative actions to address this issue. This inquiry follows reports linking digital assets to the financing of such groups, including Hamas. It’s important to note that while some in the cryptocurrency community believe the role of digital assets in funding terrorist organizations may be exaggerated, others remain deeply concerned.

Is It a Battle Against Crypto?

According to attorney Steven Nerayoff, “This isn’t a war against terrorism; it’s a war against crypto.” Meanwhile, an unexpected 60% of crypto holders do not appear to be concerned about the lack of proper regulations. This absence of oversight has significantly contributed to crypto fraud and cybercrimes. The use of cryptocurrencies in funding illegal activities has risen quickly.

Also Read: Congress and SEC Clash Over Crypto Regulations; Chair Gensler Grilled

In the Senate, Senators Cynthia Lummis and Kirsten Gillibrand have introduced a bipartisan amendment in the NDAA to prevent the wrongful use of crypto assets. This amendment mandates the Treasury to set crypto asset examination standards and conduct a study on mixers and tumblers.

“Now more than ever, we need to ensure crypto assets cannot be used for nefarious purposes by closing the loopholes criminals are eager to exploit. We need to combat the risks posed by unregulated crypto asset exchanges,” said Lummis.