In a new report, it says this technology offers “new ways of hiding cross-border transactions.”
Cryptocurrencies could reduce the effectiveness of U.S. sanctions, the Treasury Department has warned.
In a new report, it says this technology offers “new ways of hiding cross-border transactions” — giving malicious actors an opportunity to hold and transfer funds without coming into contact with the dollar-based financial system.
Airing its concerns rather candidly, the report added:
The report goes on to recommend that the “Treasury should invest in deepening its institutional knowledge and capabilities in the evolving digital assets and services space to support the full sanctions lifecycle of activities.”
All of this comes as ransomware attacks continue to become more prevalent — with businesses losing hundreds of millions of dollars per year.
North Korea, which is subject to wide-ranging U.S. sanctions, has been accused of stealing cryptocurrencies worth billions of dollars — and officials have expressed concerns that these funds are being used to further the isolated state’s nuclear capabilities.
Sanctions are imposed on countries and individuals who are found to violate human rights, facilitate terrorism, or conduct other forms of illegal activity. However, their effectiveness can be eroded if those subject to limits find other ways to transact.
But as The New York Times notes, the report was light on detail when it came to how the Treasury plans to adapt to the ever-growing crypto space.
One mooted measure includes “greater coordination with other countries to make it more difficult for cryptocurrencies to be converted into government-issued money,” the newspaper’s report adds.