US Treasury Department Says Cryptocurrencies Could Undermine Sanctions

The agency issued the warning after a six-month review of U.S. sanction programs and recommended the agency itself improve communication with financial institutions and others that touch on the crypto sector.

Oct 18, 2021 at 11:00 p.m. UTC
Updated Oct 19, 2021 at 4:02 p.m. UTC

The U.S. Treasury Department said in a report that cryptocurrencies could undermine the effectiveness of U.S. sanctions.

  • The report was released Monday. It followed a six-month review of U.S. sanctions against countries with which it is at odds or suspects of being behind illegal activity.
  • The report noted that “digital currencies, alternative payment platforms and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions.”
  • “These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system,” the report said, and could be used by adversaries “to to build new financial and payments systems intended to diminish the dollar’s global role.”
  • The U.S. has put over 9,000 sanctions in place against countries it alleges are behind terrorism and illegal actions or committed human rights violations, including North Korea and Iran, according to a New York Times story.
  • The report recommended the Treasury Dept. enhance its “institutional knowledge” of cryptocurrencies and their use.
  • It also recommended the agency improve its communications with industry organizations, financial institutions and others that touch on the crypto sector.

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James Rubin is CoinDesk's U.S. news editor based on the West Coast.