As crypto gains popularity around the world, the US government is expressing concern about their use by terrorist groups and regimes under sanctions. Indeed, the US Treasury recently sounded the alarm, calling for expanded powers to monitor and even prosecute crypto platforms based abroad. However, this offensive raises questions about the balance to be struck between national security and freedom of financial innovation.
Terrorist financing and sanctions evasion
First, Undersecretary of State Adewale O. Adeyemo emphasized the “cryptic” role of crypto in funding terrorist organizations. At the same time, he also denounced their use by countries like Russia and North Korea to circumvent American sanctions. Therefore, the Treasury considers virtual assets to be a growing threat to national security.
Furthermore, Adeyemo points out that bad actors are constantly looking for new ways to hide their identities and move their assets. However, the evolution of regulations paradoxically pushes them to turn to crypto, assets that are more difficult to trace. Faced with this trend, the Treasury is calling for additional tools to combat this phenomenon.
Claiming new crypto surveillance powers
With this in mind, Treasury is calling on Congress to grant it secondary sanctions powers. This would allow it to target foreign crypto service providers who facilitate illegal transactions. According to Adeyemo, without this new legislation, we risk seeing an increase in the use of cryptos by malicious actors.
Additionally, the Treasury requests that crypto platforms based abroad be pursued if they endanger American national security by exploiting the country's financial system. This request comes in a context where criminal interest in crypto continues to grow.
In conclusion, the US Treasury's position on foreign crypto exchanges raises essential questions about the balance to be struck between national security and financial innovation. On the one hand, concerns about terrorist financing and sanctions evasion seem legitimate. But on the other hand, an overly restrictive approach would risk compromising the potential of cryptos.
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