US Deputy Treasury Secretary Adewale Adeyemo continued to advocate increased enforcement powers for his agency in testimony before the Senate Banking Committee on April 9. During a hearing on combating illicit financing, terrorism and sanctions evasion, Adeyemo outlined three proposed reforms to improve US enforcement efforts against international bad actors using cryptocurrencies.
Adeyemo followed up on proposals made by the Treasury Department in November. In his latest testimony, Adeyemo listed three changes the department was seeking. These were to introduce secondary sanctions targeting "foreign providers of digital assets" engaging in illicit financing.
Adeyemo said U.S. sanctions prohibit institutions from using U.S. correspondent accounts and processing transactions through banks, but cryptocurrency exchanges and money services do not necessarily depend on the use of correspondent accounts. A "new secondary sanctions tool" is needed:
"We can clarify that our authorities can reach out extraterritorially when digital asset actors harm our national security while using our financial system."
Adeyemo did not explain in detail what form the new secondary sanctions might take.
