U.S. Treasury Undersecretary Wally Adeyemo said his department is working on new sanctions tools to go after bad actors in the cryptocurrency space, citing a recent settlement with Binance.
Adeyemo said in remarks prepared for the Blockchain Association Policy Summit on November 29 that the U.S. Treasury Department has called on Congress to allow sanctions to completely remove an entity from the U.S. financial system. The U.S. Treasury deputy secretary said the move was intended to prevent actors such as Hamas from "finding safe haven in the digital asset ecosystem," but he also cited a settlement agreement between U.S. authorities and cryptocurrency exchange Binance.
Adeyemo said: “Binance has been used by child sexual abuse, illegal drug trafficking and terrorism criminals over the years, involving more than 100,000 transactions.” “Groups such as Hamas, Al Qaeda and ISIS conducted these transactions.” This A deputy Treasury secretary said the U.S. government needs to coordinate with financial industry companies that share information related to combating money laundering, fraud and terrorist financing. He also said that stablecoin providers outside the United States may be targeted by authorities as Treasury officials work to "close these gaps."
Adeyemo’s comments came on the same day that the U.S. Treasury Department’s Office of Foreign Assets Control imposed sanctions on cryptocurrency mixer Sinbad, accusing the platform of facilitating money laundering for the North Korea-based Lazarus Group. On November 21, Binance reached a $4.3 billion settlement with U.S. authorities, including the Treasury Department, requiring former CEO Changpeng Zhao to step down and plead guilty to felony charges.
“We need to update our illicit financial regulators to address the challenges we face today, including those posed by the evolving digital asset ecosystem. […] We cannot rely on statutory definitions from decades ago to address the challenges we face in Illicit Financial Risks in 2023.”
In August, the U.S. Treasury Department released a draft rule aimed at addressing difficulties in reporting and paying taxes on crypto transactions. With broker reporting requirements expected to take effect in 2026, many criticized the proposal as unrealistic.
