The Biden administration has put cryptocurrency companies on notice: get tough on illicit finance flowing through your platforms or risk being cut off from the U.S. economy. That was the message from Deputy Treasury Secretary Wally Adeyemo on Wednesday, who said crypto firms need to do more to curb illicit activity.
The lack of action across the sector poses risks to U.S. national security interests, Adeyemo warned in a speech to industry leaders. He cited last month’s sanctions on a Gaza-based crypto exchange accused of funding Palestinian militant group Hamas as an example of the government’s resolve.
The Treasury Department also sent a letter to Congress requesting new legal powers to police crypto marketplaces used by illicit actors. The move follows the landmark $4.3 billion settlement by Binance, the world’s largest crypto exchange by volume, for breaches of anti-money laundering rules.
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As part of the deal, Binance CEO Changpeng Zhao pled guilty to violating U.S. financial crimes laws and stepped down as head of the company. The agreement highlighted how major crypto exchanges have failed to curb the flow of funds to sanctioned groups like Hamas and al Qaeda.
With the threat of being blocked from the U.S. banking sector and economy, the industry is now on alert to ramp up compliance efforts. The message from Washington is clear: the virtual asset space is not beyond the reach of U.S. national security tools.
