US Treasury Wants Crypto Companies To Blacklist Blockchain Wallets Used for Illegal Transactions

The US Treasury Department is now asking crypto companies to proactively blacklist blockchain wallet services if they are commonly used for illegal transactions. 

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A woman walks past the entrance of a cryptocurrency exchange office on April 16, 2021 in Istanbul, Turkey. Turkey’s Central Bank announced a ban on the use of cryptocurrencies and crypto assets for purchases.

Officials added that this should be done even without an official order from them. Ever since the crypto industry experienced massive growth, many people decided to invest lots of money in it. 

Because of this, many people decided to use it for illegal activities. For example, hackers use cryptocurrencies to transfer the money they have stolen without being caught. 

On the other hand, some state-backed cybercriminals rely on digital coins to allow their governments to evade sanctions imposed by the U.S, which can lead to national security threats. 

US Treasury’s Lastest Effort Against Illegal Crypto Transactions 

According to CoinDesk‘s latest report, the U.S. Treasury Department is specifically referring to problematic crypto wallets. 

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People use the Salvadoran government’s Chivo-wallet to make their bitcoin transactions in San Salvador, on January 26, 2022. – The International Monetary Fund (IMF) urged El Salvador to withdraw bitcoin.

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Alessio Evangelista, the Associate Director for Enforcement at FinCEN (Financial Crimes Enforcement Network) claimed that crypto service providers commonly avoid getting involved when blockchain wallets are used for illicit activities. 

He added that they are only making efforts if there’s an OFAC designation or criminal indictment released.

Aside from this, Evangelista also explained, during the Chainalysis LINKS conference that the way crypto companies ignore “red flags” of blockchain wallets puts their reputations at risk. 

On the other hand, the official also pointed out the issue with North Korea, where state-backed cybercriminals stole around $650 cryptocurrencies in an “Axie Infinity” heist. 

“These funds were stolen to support a totalitarian regime that spends its money on developing weapons of mass destruction at the expense of feeding its citizens,” said Evangelista.  

Cryptocurrency as a Sanction-Evading Tool 

Aside from North Korea, The Conversation previously reported that Russia was also accused of using cryptocurrencies to evade the sanctions implemented by the U.S. during the Russia-Ukraine conflict. 

Blockchain experts said that the country converts their money into digital coins so that they can make external transactions, allowing them to have their needed resources. 

This is what the U.S. Treasury Dept. is concerned about. As of writing, the financial department has already sanctions some crypto wallets because they are being used for illegal transactions. 

These include Blender and Tornado Cash. If you want to see further details about these blacklisted crypto wallets, you can visit this link. 

On the other hand, the U.S. Justice Department launched its first crypto criminal case affecting sanctions. 

Meanwhile, some London thieves are allegedly focusing on crypto investors. 

For more news updates about cryptocurrencies and other topics related to digital coins, always keep your tabs open here at TechTimes.  

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Written by: Griffin Davis

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