Lawmakers Push for Stricter Crypto Regulations to Combat Illicit Finance

During a Senate Banking Committee session on illicit finance and terrorism, bipartisan concern was raised over cryptocurrency misuse by harmful groups.

The discussion, named "An Update from the Treasury Department: Countering Illicit Finance, Terrorism and Sanctions Evasion," aimed to address the increasing use of digital currencies in illegal acts.

Sherrod Brown (D-Ohio), the committee's chair, pointed out that countries and terrorist groups are using cryptocurrencies to bypass strict financial rules, stressing the need for crypto platforms to follow the same regulations as banks to avoid money laundering.

Despite the crypto industry's claims of minimal involvement in illicit finance, supported by Chainalysis, lawmakers are determined to close any loopholes that allow for such misuse.

US Treasury Deputy Secretary Wally Adeyemo called for legislative changes, including new sanctions tools and updated laws, to combat crypto's exploitation by terrorists and countries like North Korea and Russia.

Adeyemo's testimony emphasized the strategic use of stablecoins by Russia to support its operations.

Senators, including Robert Menendez (D-N.J.) and Thom Tillis (R-N.C.), discussed the need for updated regulations and stronger enforcement to ensure digital currencies comply with KYC and AML standards. Tillis advocated for regulations that support digital assets while maintaining necessary legal compliance.

The session highlighted the ongoing evolution of laws and regulations around cryptocurrencies, signaling a time of significant adjustment for the crypto industry to align with anti-illicit finance measures.