U.S. Treasury Official Asks Global Regulators to Tackle Illicit Use of Crypto

An official named Sigal Mandelker from the U.S. Department of Treasury has asked regulators from the global financial space to take necessary stringent measures to stop the illicit use of digital currencies. Mandelker is the under secretary for Terrorism and Financial Intelligence of the treasury department.

She was speaking at the American Bankers Association this Monday, December 3, where she spoke about how her agency is monitoring the crypto space and why it is essential to have an increased global oversight.

Mandelker further stressed that it’s the need of the hour financial institutions and providers of crypto services to come on a common platform and combat illicit use of digital currencies. “The digital currency industry must harden its networks and undertake the steps necessary to prevent illicit actors from exploiting its services,” she said.

On the other hand, Mandelker also stressed that regulators should focus on developing strong framework for anti-money laundering (AML) and combating terror-financing-related issues. She further stressed the necessity of supervision and enforcement of AML rules.

“The lack of AML/CFT regulation of virtual currency exchangers, hosted wallets, and other providers — and, indeed, of the broader digital asset ecosystem — across jurisdictions exacerbates the associated money laundering and other illicit financing risks,” said Mandelker.

She further lauded the efforts of the Treasury Department Office of Foreign Asset Control (OFAC)’s  who introduced sanctions on Bitcoin addresses of two Iranian residents last week. The residents are accused on converting Bitcoin ransoms to Iranian rials. Hence the sanctions were levied to cut them off completely from the global financial system.

“As Iranian and other bad actors attempt to misuse digital currency to facilitate illicit activity, financial institutions, including exchangers and other providers of digital currency services, must guard against the risks of assisting these malicious actors,” she said.

She also highlighted the efforts of different regulatory bodies and how global regulators should take cue from them. “While the United States regulates, supervises, and brings enforcement actions relating to virtual currency and other digital asset financial activity, many more countries must follow suit. We have made this a priority in our international outreach, including through the Financial Action Task Force (FATF), for which the United States is currently serving as President,” said Mandelker.

Apart from this, the Financial Crimes Enforcement Network (FinCEN) is looking after regulating crypto trading platforms and related businesses in that space.