For the first time since the September 11 attacks, the U.S. Department of Treasury is pursuing significant reforms to thwart malevolent parties such as terrorist groups, transnational criminals, and rogue nations. This move is instigated by changes in platforms where these entities conduct their operations requiring more authority and tools, shared Wally Adeyemo, Deputy Secretary of the Treasury at the Blockchain Association's Policy Summit held in 2023.
"Illicit actors have always taken advantage of new technology. We saw this in the last decade when ISIS used social media to revolutionize jihadist recruitment. It mastered a new platform to spread its hate faster than social media companies or governments could impose appropriate safeguards. These reforms will not only help us curb illicit finances, but they will also level the playing field for the actors pursuing responsible and beneficial innovation and facilitate sustainable growth for the industry. It’s important that we continue to tackle this problem today so that virtual currencies do not grow into a larger illicit finance threat." said Wally Adeyemo.
In his speech, Adeyemo explained how proposals presented to Congress on November 28 would bolster its capacity to target unlawful entities operating within digital assets if approved. The recommendations comprise instituting secondary sanctions and refining existing illicit finance authorities to keep pace with the rapidly transforming digital asset ecosystem.
Adeyemo highlighted data from Office of Financial Research 2021 stating that corporations reported over two billion transactions worth $1.4 trillion in virtual currency dealings – a four-fold increase in transaction numbers and seven-fold escalation in volume compared to figures recorded in 2020. However, due to loose regulations surrounding this sector, undesirable elements are increasingly infiltrating it. Particularly concerning is Binance – recognized as the world's largest virtual currency exchange has been exploited by child sexual abusers, illegal drug traffickers, and terrorists.
The information was disclosed during a members-only event called Blockchain Association’s Policy Summit organized by Blockchain Association in Washington, D.C. from November 29-30 as mentioned on their official website.