Summary
TLDR: The US Treasury is concerned about Russia using Tether to bypass sanctions and fund military operations. They are also worried about terrorist groups using cryptocurrencies for illicit financing. Adeyemo proposed reforms to combat this threat and ensure national security. The Treasury is working to root out illicit finance in the industry as part of a broader strategy.
Key Points
1. The US Treasury is concerned about Russia’s use of Tether (USDT) to bypass sanctions and sustain military operations, highlighting the need for additional tools to safeguard national security.
2. Adeyemo’s testimony revealed a broader issue of terrorist groups and rogue states exploiting cryptocurrencies to conceal identities and transfer funds, with examples including al-Qaeda’s use of Bitcoin and transactions between the Islamic Revolutionary Guard Corps-Qods Force and Hamas.
3. To combat this threat, Adeyemo proposed three key reforms: introducing secondary sanctions for foreign crypto providers involved in illicit finance, expanding authority to cover key players in the cryptocurrency industry, and addressing jurisdictional risks from offshore crypto platforms.