The growing misuse of stablecoins globally, tied to issues like war, crime, and high inflation, has become a cause for concern. Deputy Secretary of the Treasury, Wally Adeyemo, recently spoke up at a Blockchain Association event, urging immediate action. His main focus was on stablecoin issuers outside the U.S., emphasizing the need to protect dollar-backed stablecoins from being exploited by harmful entities, like terrorists.
Though he didn’t mention Tether by name, Adeyemo’s message was a clear call to beef up defenses against cryptocurrency misuse.
This situation raises a tricky question: Should stablecoin issuers be responsible for stopping misuse, or could these duties hinder progress and innovation in the cryptocurrency sector? Let’s dig into this issue and explore the potential consequences.
Adeyemo’s Plea: Walking a Fine Line
Wally Adeyemo drew attention to his previous speech at CoinDesk’s Consensus 2022, where he championed crypto’s potential for innovation but urged proactive measures within the industry to deter its use by transnational criminal organizations and terrorists.
Adeyemo criticized the need for more responses from several firms, both large and small, in addressing illicit activities within the crypto sphere. He underscored the gravity of this situation as a clear and present threat to national security, referencing the U.S. authorities’ settlement with Binance. This settlement highlighted allegations of Binance being utilized for facilitating illegal transactions involving terrorism, drug trafficking, and exploitation.
Read More: Binance Ex-CEO Changpeng Zhao Faces Grim Punishment, Predicts Expert
Adeyemo’s Warning
With a serious tone, Adeyemo directly addressed those in the digital asset industry who think they’re above the law. His message was clear: practices aiding criminals, terrorists, and rogue states won’t be tolerated. He firmly stated that accountability will be enforced.
The Hidden Battle: Crypto’s Role in Security
Adeyemo suggested that the crypto sector should use information exchanges, similar to U.S. banks, to detect and punish terrorists. The Treasury’s revelation about Sinbad, a crypto mixing service in North Korean hacker transactions, showcased the government’s commitment to fighting illicit financial operations.
Chainalysis’ report pointed at Sinbad.io, a crypto mixer service, as a key player in North Korean state-backed hacking group Lazarus in 2022. Experts at Elliptic supported this, revealing Sinbad as a rebranded version of Blender, a mixer blacklisted by OFAC in 2022.
Also Read: Justice Department Announces Seizure of $9 Million in Tether
Tether’s Path Is not Smooth
Amid Stark’s ominous warnings, Tether USDt hovered near its midpoint for five days. The coin, just 0.09% below its five-day high and 0.04% above its low of $0.999623000621796, highlights the vulnerability of coins without solid crypto regulations. Do you agree?