Treasury Taking Comments on Risks Posed by Crypto
The United States Department of the Treasury filed a Request for Comment to purportedly seek feedback from the nation about the “national security risks posed by digital assets.”
“WASHINGTON — The U.S. Department of the Treasury today filed a Request for Comment (RFC) to seek feedback from the American people on the illicit finance and national security risks posed by digital assets. The filing is pursuant to President Joe Biden’s Executive Order, “Ensuring Responsible Development of Digital Assets” and the subsequent Illicit Finance Action Plan released by the Treasury Department last week.”
“Without appropriate controls and enforcement of existing laws, digital assets can pose a significant risk to national security by facilitating illicit finance, such as money laundering, cybercrime and terrorist actions,” U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said. “As we work to implement the Illicit Finance Action Plan, hold bad actors accountable and identify potential gaps in existing enforcement, we look forward to receiving the public’s input on this urgent work.”
U.S. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson at an AML conference.
Relevant RFC text:
Executive Order 14067 of March 9, 2022, “Ensuring Responsible Development of Digital Assets” (hereafter “Executive Order”) (87 FR 14143; March 14, 2022), outlines principal U.S. policy objectives with respect to digital assets. These principal policy objectives are:
Section 7(c) directs the Secretary of the Treasury, in consultation with the Secretary of State, the Attorney General, the Secretary of Commerce, the Secretary of Homeland Security, the Director of the Office of Management and Budget, the Director of National Intelligence, and the heads of other relevant agencies shall develop a coordinated action plan based on the Strategy’s conclusions for mitigating the digital-asset-related illicit finance and national security risks addressed in the updated strategy. The action plan shall address the role of law enforcement and measures to increase financial services providers’ compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations related to digital asset activities.
In September 2022, the Treasury Department submitted this action plan to the White House and publicly released the report. The digital asset ecosystem is rapidly evolving, and the Department of the Treasury is committed to continuing to monitor emerging risks in partnership with other U.S. government agencies, foreign governments, and the private sector, which will inform other potential actions to mitigate these risks. Through this request for comment (RFC), Treasury is requesting input from the public to understand the public’s view on the emerging risks as well as what actions the U.S. government and Treasury Department should take to mitigate the risks. Through this RFC, Treasury also seeks to further understand how public-private collaboration may improve efforts to address the risks.
III. Request for Comments
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. Commenters are encouraged to address any or all of the following questions, or to provide any other comments relevant to the development of the report. When responding to one or more of the questions below, please note in your response the number(s) of the questions to which you are responding. In all cases, to the extent possible, please cite any public data related to or that support your responses. If data are available, but non-public, describe such data to the extent permissible.A. Illicit Finance Risks
The term “digital asset” refers to all CBDCs, regardless of the technology used, and to other representations of value, financial assets and instruments, or claims that are used to make payments or investments, or to transmit or exchange funds or the equivalent thereof, that are issued or represented in digital form through the use of distributed ledger technology. Some examples of digital assets include cryptocurrencies, stablecoins, and CBDCs. Regardless of the label used, a digital asset may be, among other things, a security, a commodity, a derivative, or other financial product. Digital assets may be exchanged across digital asset trading platforms, including centralized and decentralized finance platforms, or through peer-to-peer technologies.
The term “virtual asset” refers to a subset of digital assets that does not include CBDCs or representations of other financial assets, such as digitized representations of existing securities or deposits.
The term “virtual asset service provider” as defined by FATF, means any natural or legal person who is not covered elsewhere under the FATF Recommendations, and as a business conducts one or more of the following activities or operations for or on behalf of another natural or legal person:
i. exchange between virtual assets and fiat currencies;<br>ii. exchange between one or more forms of virtual assets;<br>iii. transfer of virtual assets;<br>iv. safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and<br>v. participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
Deputy Assistant Secretary, Office of Terrorist Financing and Financial Crimes, U.S. Department of the Treasury.
Ensuring Responsible Development of Digital Assets; Request for Comment | www.federalregister.gov, archive.is, archive.org
Also in PDF: pdf
Western governments have nearly dropped the pretext of decision-making with input from the public. Every decision is presented as if you are a juvenile being told that something outside your control is happening. I do not even see why the Treasury is bothering to take comments from the public. Also sounds like blockchain analytics companies are going to be an official branch of law enforcement (they are already an unofficial branch).