The Treasury Department reiterated its calls for Congress to grant the department additional tools to address illicit actors’ use of cryptocurrencies to facilitate crime.

Crypto Risks: Testifying at a Senate Banking Committee hearing, Deputy Treasury Secretary Wally Adeyemo said terrorist groups, state actors, and cartels are increasingly using crypto to circumvent sanctions, engage in money laundering, and fund illicit activities, particularly as policymakers have worked to cut off their access to the traditional financial system.

Treasury Proposal: Adeyemo urged Congress to take up Treasury’s proposal to:

• Introduce a secondary sanctions tool targeted at foreign digital asset providers that facilitate illicit finance.

• Expand the reach of existing authorities to explicitly cover digital assets players and activities.

• Address jurisdictional risk from offshore cryptocurrency platforms.

ICBA View: In a recent comment letter, ICBA said a Financial Crimes Enforcement Network proposal to institute recordkeeping and reporting requirements for financial institutions is insufficient to adequately protect against crypto-related illicit financial activity. ICBA also supports global efforts to advance international cryptoasset regulation, including the Financial Stability Board’s framework to support consistent regulatory standards and the International Organization of Securities Commissions’ baseline policy recommendations.