The United States has recently been expressing concerns regarding the use of cryptocurrencies in financing terrorism and illegal activities. Criticism has been particularly directed at firms within the digital asset sector for not making sufficient efforts to stop the flow of illegal finance. These criticisms have resurfaced following attacks carried out by Hamas in Israel.
US Intervention on the Horizon
In an event in London, US Deputy Treasury Secretary Wally Adeyemo shared his concerns about this issue. Adeyemo noted that while the majority of financial institutions are keen on stopping terrorist financing, there is a need for greater responsibility within the digital asset sector.
He observed, “Our expectation is that financial institutions and digital asset companies and others in the virtual currency ecosystem take steps to prevent terrorists from being able to access resources.”
”If they do not act to prevent illicit financial flows, the United States and our partners will.”
Adeyemo emphasized the need for financial institutions and digital asset companies to be more proactive in preventing terrorists from accessing resources.
In recent weeks, the US added a Gaza-based cryptocurrency exchange to its sanctions list. Additionally, the US imposed extra sanctions on certain assets in Hamas’s investment portfolio and on individuals managing these assets.
While Adeyemo acknowledged that cryptocurrencies currently do not play a significant role in the financing of terrorist groups, he stressed the importance of taking preventive measures now to stop the future use of this technology for illegal financing.