U.S. Treasury Says It Wants to Better Money Laundering Regulations Around Crypto, Other Illicit Finance

In a Thursday release, our department unveiled the “National Strategy for Countering Terrorist and Illicit Financing” for 2024, detailing our priorities in combating illicit financing. The Treasury Department emphasized its ongoing efforts concerning cryptocurrencies, including imposing sanctions on specific exchanges such as Bitzlato and Lazarus, settling with Binance, and issuing warnings about pig butchering scams. This yearly publication outlines our approach to tackling illicit finance and the potential impact of crypto regulations in addressing this issue.

As a researcher examining Thursday’s strategy document, I identified four key areas of focus. These priorities aim to:

Revising current regulatory structures for cryptocurrencies aligns with these objectives, according to the strategy paper.

The document mentions the possibility of modifications to the United States’ regulatory scheme, specifically regarding anti-money laundering and counteracting terrorist financing. Additionally, efforts are being made towards global adoption of Financial Action Task Force guidelines.

To effectively regulate virtual asset activities under the current AML/CFT framework in the United States, it is crucial to dedicate ample supervisory and enforcement resources and invest in advanced technology and continuous training for analysts, investigators, and regulators. This will enable them to deepen their understanding of emerging technologies and proficiently analyze public blockchain data.

As an analyst, I can share that during a recent press call, I heard the Treasury official announce that they have held discussions with legislators regarding the Department of the Treasury’s appeal for expanded authority and scrutiny over specific cryptocurrency matters. This involves Deputy Treasury Secretary Wally Adeyemo and Under Secretary for Terrorism and Financial Intelligence Brian Nelson.

They indicated a commitment to collaborating with Congress on the proposed initiatives, offering technical support, and emphasized the importance of securing the necessary authorities for this institution.

In the document released on Thursday, the Treasury Department announced its intention to keep track of the developing trends in digital asset payments, such as decentralized finance, and offer technical support to Congress. Furthermore, it will explore new ways to utilize sanctions and secure additional resources for the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Asset Control (OFAC).