Trésor Dep Sec argues for Crypto Wallet ID


A proposal being considered by the US Treasury Department that would identify who controls non-hosted cryptocurrency wallets would also enable innovations related to fighting financial crime, Assistant Secretary Wally Adeyemo told Consensus 2022, according to a report from CoinDesk Friday, June 10.

Adeyemo told attendees that storing crypto anonymously outside of regulated wallets has allowed users to circumvent sanctions and anti-money laundering (AML) regulations, and the department is “working to address the unique risks associated with it.” to non-hosted wallets”.

He warned that wrongdoers could take advantage of the current system.

“Unhosted wallets are actually just addresses on a blockchain,” Adeyemo said. “It can be difficult to determine who really owns and controls them, creating opportunities to abuse this increased anonymity.”

In 2020, then-Treasury Secretary Steven Mnuchin first proposed know-your-customer (KYC) identity checks on people using private wallets, but the proposal was delayed until several times, according to the report. The EU has adopted similar measures, which have drawn criticism over innovation stifling and privacy concerns.

“I understand and respect the need and desire for privacy, but we need to make sure that we are also in a place where we are not creating pathways where those who want to move funds illicitly can make more use of digital assets. than traditional assets,” Adeyemo said.

Related: Regulatory Rumbles Are Forcing Companies to Rethink Ransomware Policies

In March, President Joe Biden signed new legislation that “strongly advises” businesses to report ransomware attacks to the Department of Homeland Security, but it did not create penalties for failing to do so. . However, this creates more problems for executives trying to decide whether or not to pay ransomware demands at the risk of violating penalties, which can result in hefty penalties.

The new Treasury Department advice has also destabilized companies that facilitate these payments, from lawyers to insurance companies with ransomware policies, according to Michael Phillips, director of claims for cyber insurance company Resilience.

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