US Treasury Department: Russia uses USDT to evade sanctions! Congress urgently needs to expand regulatory authority

In a statement to the Senate, Treasury Undersecretary Wally Adeyemo expressed concerns about virtual currencies funding terrorist organizations.

He cited several points of evidence:

• Five years ago, Al Qaeda used social platforms to operate Bitcoin money laundering, collect cryptocurrency donations, and use them to purchase weapons.

• Over the past year, Iran’s Islamic Revolutionary Guard Corps has transferred funds to the Palestinian Islamic Jihad (PIJ) in cryptocurrency.

• Hamas also solicits small donations through cryptocurrency.

He said: The fact is that terrorist organizations are constantly seeking new ways to hide their identities and transfer virtual currencies in accordance with government sanctions. This is not only terrorist organizations, but also North Korea and Russia. and other countries.

Wally Adeyemo pointed out that North Korea uses numerous complex cyber attacks and relies on anonymity technologies such as currency mixers to conceal the source of funds, and also uses over-the-counter transactions to obtain legal currency; the United States has also discovered that Russia is increasingly using stablecoins currency and other payment mechanisms to circumvent U.S. sanctions and continue to fund its war.

Ministry of Finance advocates three reforms

Wally Adeyemo advocates three reforms he proposed to the committee in November last year:

1. Established under the Bank Secrecy Act New regulatory agency (sanction tool)

Wally Adeyemo believes that a new asset class financial institution should be established based on the Bank Secrecy Act (BSA) to regulate exchanges, VASPs, crypto wallet service providers, Node validators and DeFi, etc., to comply with anti-money laundering and other requirements.

2. Expand the powers of existing regulatory agencies

Legislation should be clearly authorized to authorize the Office of Foreign Assets Control (OFAC) to have extraterritorial jurisdiction over transactions in U.S. dollar stablecoins.

3. Cooperation with regulatory agencies in various countries

He pointed out that the third reform is aimed at solving the jurisdictional risks of offshore encryption platforms, which is a key challenge.

Wally Adeyemo’s appeal is to further improve the authority and sanction tools of relevant regulatory agencies to further reduce the risk of crypto funding, especially as the crypto ecosystem is developing rapidly.

He concluded: Without Congress taking action and providing the necessary sanctions tools, the adoption of virtual assets by these bad actors will only increase.

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