Treasury urges crypto companies to ‘prevent’ terrorist financing

The US Treasury’s Deputy Secretary, Wally Adeyemo, has warned crypto firms to ensure that terrorist organizations are not able to use crypto to raise funds.

“Our expectation is that financial institutions and digital asset companies and others in the virtual currency ecosystem will take steps to prevent terrorists from being able to access resources. If they do not act to prevent illicit financial flows, the United States and our partners will,” Adeyemo said in a speech in London on Friday.

The Treasury Department’s deputy secretary added that it’s “committed to engaging” with crypto firms on the steps needed to prevent organizations like Hamas from moving funds.

“But, there are those in the digital asset space who wish to innovate without regard to consequences instead of doing so responsibly, including protecting against illicit financing,” he said.

Adeyemo’s speech comes a day after Senator Cynthia Lummis and Rep. French Hill addressed US Department of Justice Attorney General Merrick Garland in a letter focused on Binance and Tether.

“We urge the Department of Justice to carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism through violations of applicable sanctions laws and the Bank Secrecy Act,” the two wrote.

They also asked Garland and the DOJ to “reach a charging decision on Binance” and “expeditiously conclude [their] investigations into the ongoing illicit activities involving Tether.”

Tether, in a post on Thursday, said there’s “no evidence” that it violated sanctions laws or the Bank Secrecy Act. Binance did not return a request for comment.

Lummis and Hill referenced a controversial Wall Street Journal report, though Adeyemo’s speech lacked any mention of it.

The report from the WSJ — which claimed entities such as Hamas raised millions through crypto based on now-debunked data from Elliptic — spurred over 100 Democrats to pen a letter to the Biden Administration asking for answers on how terrorist organizations are able to raise money through crypto.

Elliptic has since publicly refuted the data used in the WSJ report, claiming that Hamas has not raised millions in crypto. The WSJ report also drew widespread critique from members of the crypto industry.

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