US Treasury Seeks Public Comments on Crypto-Related Illicit Finance and National Security Risks

The U.S. Department of the Treasury is seeking public input on “digital-asset-related illicit finance and national security risks.” The department warned: “The growing use of digital assets in financial activity heightens risks of crimes such as money laundering, terrorist and proliferation financing, fraud and theft schemes, and corruption.”

The U.S. Department of the Treasury published a notice Tuesday inviting “interested members of the public to provide input pursuant to The Executive Order of March 9, 2022, ‘Ensuring Responsible Development of Digital Assets.'” The notice adds:

The department invites comments on the digital-asset-related illicit finance and national security risks as well as the publicly released action plan to mitigate the risks.

“Treasury welcomes input on any matter that commenters believe is relevant to Treasury’s ongoing efforts to assess the illicit finance risks associated with digital assets as well as the ongoing efforts to mitigate the risks,” the notice adds. Comments must be received on or before Nov. 3.

“The growing use of digital assets in financial activity heightens risks of crimes such as money laundering, terrorist and proliferation financing, fraud and theft schemes, and corruption,” the Treasury detailed. “These illicit activities highlight the need for ongoing scrutiny of the use of digital assets, the extent to which technological innovation may impact such activities, and exploration of opportunities to mitigate these risks through regulation, supervision, public-private engagement, oversight, and law enforcement.”



The Treasury requested answers to a list of questions concerning illicit finance risks relating to digital assets, non-fungible tokens (NFTs), decentralized finance (defi), and peer-to-peer technologies.

The questions focus on illicit finance risks; anti-money laundering and countering the financing of terrorism (AML/CFT) regulation and supervision; global implementation of AML/CFT standards; private sector engagement and AML/CFT solutions; and central bank digital currencies (CBDCs).

One of the questions asks how the Treasury can “most effectively support consistent implementation of global AML/CFT standards across jurisdictions for digital assets.” In addition, the Treasury asked whether there are specific countries or jurisdictions where the U.S. government should focus its efforts “to strengthen foreign AML/CFT regimes related to virtual asset service providers.” The full list of questions can be found here.

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