In its 2024 National Strategy for Combating Terrorist and Other Illicit Financing report, the US Treasury Department announced its intention to focus on regulating cryptocurrencies and emerging technologies to address risks posed by illicit actors. The report highlighted the increasing use of digital assets by criminal organizations for activities such as money laundering, terrorist financing, and cybercrime, prompting the need to close regulatory gaps and enhance enforcement actions. The Treasury plans to implement comprehensive regulations for digital assets and virtual asset service providers (VASPs), as well as mandate anti-money laundering and countering the financing of terrorism (AML/CFT) programs for investment advisers. Additionally, the Treasury will monitor and adapt rules for emerging technologies like DeFi to prevent criminals from exploiting them.
The Treasury’s strategy also emphasizes the importance of enhancing operational effectiveness within law enforcement and government agencies. Initiatives include providing robust training, leveraging advanced technologies like AI and blockchain analytics, and fostering public-private partnerships to share crucial information on illicit activities. International collaboration is also a key focus for the Treasury, as it seeks to work with global partners to strengthen AML/CFT standards and share intelligence to disrupt cross-border criminal networks.
Another priority for the Treasury is supporting responsible technological advancements, including developing secure digital identity solutions and promoting innovation in AML/CFT compliance technologies within the private sector. The ongoing modernization of the AML/CFT regime aims to ensure that both the public and private sectors can effectively address the most significant illicit finance risks. Despite advancements, the Treasury acknowledged ongoing challenges in combatting illicit activity, particularly in the virtual asset space, calling for additional resources and legislative support to strengthen supervision and enforcement efforts among non-bank financial institutions and new market entrants.
Overall, the 2024 Strategy reaffirms the US government’s commitment to maintaining a secure and transparent financial system. By addressing risks associated with digital assets and fostering international collaboration, the Treasury aims to create a resilient environment that deters illicit activities while supporting legitimate financial innovation. The comprehensive approach outlined in the report seeks to mitigate the misuse of emerging technologies by illicit actors, promoting a transparent and secure financial system for all stakeholders.
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