U.S. Treasury Official Warns: Tether and Other Stablecoins Under Scrutiny

• U.S. Treasury Official Highlights Risks Posed by Non-U.S. Stablecoin Issuers
• Addressing the Crypto Industry's Role in Illicit Finance
• Emphasizing on the Importance of Regulation
• Holding Accountable Those Abusing Crypto for Illegal Activities
• Recent Action against Crypto Mixing Service
• Recent Remarks from Adeyemo

U.S. Treasury Official Highlights Risks Posed by Non-U.S. Stablecoin Issuers

A high-ranking official from the U.S. Department of the Treasury has recently raised concerns over the risks accompanying non-U.S. stablecoin issuers that utilize dollar backing. This concern is mainly centered around the potential misuse of these platforms by harmful entities.

Addressing the Crypto Industry's Role in Illicit Finance

Deputy Secretary of the Treasury, Wally Adeyemo, made broad comments regarding illegal finance within the cryptocurrency industry during a speech scheduled to be given at a Blockchain Association event in Washington. A significant part of his address was aimed at stablecoins. Adeyemo stated that dollar-backed stablecoin providers outside the United States should not be permitted to take advantage of U.S. currency without implementing measures to prevent their platforms from being exploited by terrorists.

Emphasizing on the Importance of Regulation

The Deputy Secretary referenced his previous address at Consensus 2022, wherein he described cryptocurrency as a remarkable opportunity for innovation. Yet, he also underlined the necessity for the industry to actively work towards preventing digital assets from being misused by terrorist groups, transnational criminal organizations, and rogue states. He expressed his disappointment regarding the industry's tepid response to his call.

While acknowledging that some companies have taken action to avoid illegal activities, Adeyemo highlighted that many firms, both big and small, have not, posing a severe risk to national security. He brought up the recent settlement of U.S. authorities with Binance as an example, noting that the cryptocurrency exchange was exploited by terrorists, drug traffickers, and child abusers.

Holding Accountable Those Abusing Crypto for Illegal Activities

Adeyemo issued a stern warning to the digital asset industry, particularly those who believe they are exempt from the law or who knowingly ignore it, and those who promote assets and services that are exploited by criminals, terrorists, and rogue states. His message was clear: such actions will be found and those responsible will be held accountable.

The Deputy Secretary suggested that the cryptocurrency sector could learn from the U.S. banking industry's efforts in establishing information exchanges about illegal actors.

Recent Action against Crypto Mixing Service

In related news, the Treasury recently sanctioned another cryptocurrency mixing service - Sinbad - for allegedly supporting transactions linked to North Korean hacking activities.

Recent Remarks from Adeyemo

Further comments from the Deputy Secretary were added on November 29, 2023 at 16:47 UTC.

Edited by Jonathan Stoker