U.S. Government Warns Crypto Companies of Economic Exclusion Over Illicit Finances

Deputy Treasury Secretary Wally Adeyemo has issued a warning that cryptocurrency companies face exclusion from the broader U.S. economy unless they effectively block and report illicit money flows. Speaking at a Blockchain Association event, Adeyemo emphasized the need for crypto firms to take stronger measures against the illicit financial activities that pose a risk to the U.S. He conveyed a clear message that the government is committed to using its tools to safeguard national security.

In a recent development, the Biden administration has requested new legislation from Congress, seeking to grant the Treasury the authority to regulate crypto marketplaces utilized by entities deemed illicit by the U.S. government. This move follows October's sanctions targeting funding for the Palestinian militant group Hamas, where a Gaza-based cryptocurrency exchange was among the identified targets.

The preceding week saw Changpeng Zhao, the CEO of Binance, pleading guilty to violating U.S. anti-money laundering laws in a $4.3 billion settlement. Zhao stepped down from his position, acknowledging mistakes. Prosecutors accused Binance of breaking U.S. anti-money laundering and sanctions laws, alleging the failure to report over 100,000 suspicious transactions involving organizations labeled as terrorist groups, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria. Binance responded by stating its efforts to enhance the platform's safety and security.