As the U.S. Treasury Department takes steps to cut off terrorist groups and other malign actors from the traditional financial system, terrorists and others are looking for additional ways to move resources, said U.S. Treasury Deputy Secretary Adewale Adeyemo.
“We are increasingly concerned about the ways these actors are using cryptocurrencies to circumvent our sanctions.”
In testimony before the Senate Banking Committee, Deputy Secretary Adeyemo pointed to the example of Al-Qaida and affiliated terrorist groups based in Syria which operated a bitcoin laundering network to solicit crypto currency using social media platforms, laundered the proceeds through various gift card exchanges, and purchased what they needed to advance their violent agenda.
“Most recently, over the past year, we have seen the Islamic Revolutionary Guard Corp’s Quds Force transfer cryptocurrency to Hamas and the Palestinian Islamic Jihad in Gaza. . . And to be clear, it’s not just terrorist groups, but state actors like the DPRK and Russia as well.”
Deputy Secretary Adeyemo said the Treasury Department has a long track record of taking action against such malign actors thwarting their access to the traditional financial system with the authorities given to it by Congress, and the Department continues to utilize them. But with the increasing use of cryptocurrencies and virtual assets, “We need new tools,” he said.
“First is the introduction of a secondary sanctions tool targeted at foreign digital asset providers that facilitate illicit finance. Second, is a reform centered on modernizing and closing gaps in existing authorities by expanding their reach to explicitly cover the key players in core activities of the digital asset ecosystem. Finally, the third reform addresses jurisdictional risk from offshore cryptocurrency platforms, which is a key challenge that we face today.”
The use of emerging technologies by illicit actors has impacts on national security, foreign policy, and the economy, said Treasury Deputy Secretary Adeyemo. While traditional financial products and services may still be preferred by those seeking to do us and our allies harm, he declared, “We fear that without congressional action to provide us with necessary tools, the use of virtual assets by these actors will only grow.”
New Financial Tools Needed to Counter Terrorists
- Policy Office
As the U.S. Treasury Department takes steps to cut off terrorist groups and other malign actors from the traditional financial system, terrorists and others are looking for additional ways to move resources, said U.S. Treasury Deputy Secretary Adewale Adeyemo.
