This year, cryptocurrency and digital assets have made significant strides, with institutional giants and nations such as El Salvador adopting Bitcoin and crypto assets into their financial ecosystems.
This, however, has been a source of concern for the Biden administration. The US Treasury Department recently published a study on sanctions, alleging that digital assets undercut US-led sanctions efforts. According to the official report,
“Technological advancements such as digital currencies, alternative payment platforms, and new methods of concealing cross-border transactions all have the potential to diminish the effectiveness of American sanctions. These technologies enable malicious actors to store and move money outside of the conventional financial system. They also strengthen our enemies’ efforts to develop alternative banking and payment systems with the goal of eroding the dollar’s worldwide position,”
The US Dollar is the worldwide trade currency, and the US has imposed at least 9,000 penalties on companies and governments deemed to be in violation of various laws. However, crypto assets have grown in popularity as a way for sanctioned countries to circumvent the limitations. Iran has lately pushed for the use of Bitcoin to settle international commerce.
The US Treasury Is Interested in Expanding Its Knowledge of Digital Assets
According to the official review assessment, the agency’s understanding of the developing digital assets and services sector is insufficient to cover the entire lifecycle of sanctions operations.
“Treasury should engage in expanding its institutional expertise and skills in the emerging digital assets and services sector in order to support the entire lifecycle of sanctions-related operations,”
Additionally, the Biden administration was the first to take the ransomware threat seriously, not only issuing warnings against such attacks but also issuing the first penalties on a Russian exchange when almost $590 million in crypto ransom was paid in 2021 alone. In approximately the last decade, the US Treasury Department has connected over $5 billion in Bitcoin ransom payments.
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