U.S. Treasury requests public comment on curbing crypto-related crimes

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U.S. Depart­ment of the Trea­sury has called on the pub­lic to pro­vide feed­back on the role of dig­i­tal assets in facil­i­tat­ing illic­it finance and how the reg­u­la­tor might cur­tail the asso­ci­at­ed risks.

On Sep­tem­ber 19 the Trea­sury announced the pub­lic feed­back will guide its per­spec­tive in draft­ing a reg­u­la­to­ry bill as request­ed by Biden’s Exec­u­tive Order on crypto.

On March 9, 2022, Pres­i­dent Joe Biden released an exec­u­tive order that direct­ed all fed­er­al agen­cies to draft cryp­tocur­ren­cy reg­u­la­tions that address six key issues, includ­ing con­sumer pro­tec­tion, mit­i­gat­ing illic­it finance, and pro­mot­ing U.S. lead­er­ship in the glob­al finan­cial system.

The exec­u­tive order not­ed that the use of dig­i­tal assets had giv­en bad actors the lever­age to eas­i­ly engage in finan­cial crimes relat­ed to mon­ey laun­der­ing, ter­ror­ism, fraud, and theft schemes.

The Trea­sury said it has worked with sev­er­al gov­ern­ment agen­cies to devel­op an action plan that seeks to mit­i­gate the illic­it activ­i­ties. How­ev­er, the reg­u­la­tor is open to col­lab­o­rat­ing with the pub­lic to devel­op a coor­di­nat­ed action plan.

Through this request for com­ment (RFC), The Trea­sury is request­ing input from the pub­lic to under­stand its view on the emerg­ing risks and what actions the U.S. Gov­ern­ment and Trea­sury Depart­ment should take to mit­i­gate them.

Inter­est­ed mem­bers of the pub­lic are request­ed to com­ment on ques­tions relat­ing to 

  • How cryp­to might be used in illic­it finance and the risk they pose.
  • How the U.S. gov­ern­ment might pre­vent crim­i­nals from mis­us­ing cryp­to assets.
  • How the Trea­sury can part­ner with the pri­vate sec­tor to com­bat illic­it finance.

The Trea­sury also asked to know how blockchain ana­lyt­ics tools can help improve its AML/CFT com­pli­ance process and how it can cur­tail illic­it risks should a U.S. CBDC roll out.

U.S. moves to regulate crypto

U.S. Fed­er­al agen­cies, includ­ing the Trea­sury, are gear­ing up to pro­vide a coor­di­nat­ed action plan to reg­u­late the cryp­to industry.

On Sep­tem­ber 17, The White House released its frame­work to address cryp­to reg­u­la­tion, cryp­to fraud, and the fea­si­bil­i­ty of devel­op­ing a Dig­i­tal Dollar.

Ongo­ing dis­cus­sion in the U.S. Con­gress hints at plans to allow the Com­mod­i­ty Futures Trad­ing Com­mis­sion (CFTC) to reg­u­late cryp­tocur­ren­cies, espe­cial­ly Bit­coin and Ethereum.

SEC chair­man Gary Gensler sup­port­ed the motion, adding that he would give the CFTC greater con­trol over the cryp­to mar­ket “as long as it does not take away pow­er from the SEC.”

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