US Treasury Holds a Meeting With Crypto Leaders to Discuss Regulatory Challenges
- Secretary of the Treasury, Steven Mnuchin, said the country welcomes innovations, but they must not compromise national security
- Treasury’s Office of Foreign Asset Control sanctioned 2 Chinese individuals for taking part in money-laundering activities linked to a crypto exchange hack
- Treasury could gain more control over the digital asset space, if planned changes are approved
Yesterday, the U.S. Department of Treasury organized a meeting to talk about the challenges of regulating the cryptocurrency space.
The United States welcomed novelties that have the ability to improve the financial system, however, the country has to make sure that such novelties do not compromise national security, said Secretary of the Treasury Steven Mnuchin.
“The U.S. welcomes responsible innovation, including new technologies that may improve the efficiency of the financial system,” said Mnuchin. “We must ensure that we balance innovation with the need to protect our national security and maintain the integrity of our financial system.”
The Treasury’s Office of Foreign Assets Control (OFAC) penalized two Chinese individuals yesterday, Tian Yinyin and Li Jiadong, for participating in money-laundering activities linked to a multi-million dollar crypto exchange hack. In addition, OFAC sanctioned 20 bitcoin addresses, all of which are connected to Tian and Li.
Mnuchin has voiced concerns about the need to eradicate bad actors from the digital asset space. He characterized this problem as a “national security issue.” At that time, he said that very strong regulations are required to prevent crypto from turning into something like the anonymous Swiss bank accounts, “which were obviously a risk to the financial system.”
President Donald Trump’s 2021 budget plan included a proposal to bring the U.S. Secret Service back to the Treasury to provide assistance in fighting crypto crime. If it goes through, the Treasury could gain more control over the digital asset space.
On the other hand, the Internal Revenue Service is convening a meeting today at its headquarters in Washington, D.C., to discuss tax-related challenges regarding cryptocurrencies. The summit will cover four 90-minute panels discussing technology updates, taxation issues in crypto exchanges, tax return preparations, and regulatory conformity.
One-fourth of people who use Bitcoin are criminals, while 50% of all Bitcoin transactions are connected with illicit activities, said a member of the U.S. Federal Reserve’s board of governors back in December.
The founder of ChangeOutput, Justin O’Connell, recently said that a large number of banks don’t facilitate crypto-related operations because they think that cryptocurrencies are mostly used for illegal activities.
