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The US officials stated they will limit cryptocurrency firms’ operation in the country if they fail to comply with AML regulations and prevent money laundering via virtual assets flows through virtual assets.
The Deputy Treasury Secretary, Wally Adeyemo, warned the crypto industry to follow international laws for virtual asset service providers adequately. He threatened the crypto firms that the US would diminish their operation and cut off companies from the broader US economy. At the event hosted by the Blockchain Association, Adeyemo stated that crypto firms are not complying with the latest AML regulations to combat financial crimes; they need to do more to reduce the illicit cash flow in the global economy through virtual assets. He also stressed the lack of efficient actions from these firms will damage the stability of the worldwide economy.
Adeyemo added that the crypto firms needed to collaborate with the US government to prevent money laundering and terrorist financing from occurring. Furthermore, he said that the US would monitor the crypto firms and take action against those who do not comply with the regulations. He further stated, “Our actions over the last year send a clear message: we will not hesitate to bring to bear tools across government to protect our national security.” The Biden administration also sent a letter to Congress requesting them to design new legislation that would assist the country’s police and Treasury authority in detecting illicit activities in the crypto industry and arrest the bad actors. It ensures the virtual asset service providers (VASPs) are upholding the international standards to operate in the US and combating financial crimes, which bolsters the country’s security as well as secure the dignity of the global financial system.
The decision follows an announcement of sanctions by the United States in October, which targeted a cryptocurrency exchange that was involved in illegal activities among other platforms that are nonconforming AML derivatives. These new guidelines aim to prevent funding for the terrorist organisation. Previously, the US endorsed civil penalties of $4.3 billion to a crypto firm due to not complying with the rigid regulations and failing to report more than 100,000 suspicious transactions through crypto exchange wallets. Adeyemo emphasised that governments should work together and create a unified set of rules for crypto firms. He claimed this would help create a more secure environment for crypto users and prevent money laundering.