Treasury Says Crypto Reduces Efficacy of US Sanctions, Seeks More Funding
The U.S. Department of the Treasury says that the growing use of crypto assets challenges the efficacy of American sanctions. “We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions,” the Treasury Department explained.
The U.S. Department of the Treasury released its 2021 Sanctions Review Monday. “Technological innovations such as digital currencies, alternative payment platforms, and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions,” the report details, elaborating:
While sanctions remain an essential and effective policy tool, they also face new challenges including rising risks from new payments systems, the growing use of digital assets, and cybercriminals.
“We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions,” the Treasury Department stated.
To “mitigate those challenges and bolster the effectiveness of Treasury’s role in sanctions moving forward,” the report provides several recommendations.
One of them is “modernizing Treasury’s sanctions technology, workforce, and infrastructure.” The Treasury Department “must have the right expertise, technology, and staff to support a robust and effective sanctions policymaking and implementation process,” the report emphasizes, adding:
Treasury should invest in deepening its institutional knowledge and capabilities in the evolving digital assets and services space to support the full sanctions lifecycle of activities.
On Tuesday, Wally Adeyemo, deputy secretary of the Treasury, told lawmakers that the Biden administration’s financial intelligence and sanctions units need significantly more funding and staff to combat national security threats, including those arising from ransomware and cryptocurrency markets, the Wall Street Journal reported.
“One of the most important areas for us, frankly, is ensuring that we have a workforce that understands these issues going forward,” Adeyemo said, noting:
Many of these crypto exchanges and cybercriminals that facilitate ransomware exist outside of the United States and have an impact here.
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