Treasury official acknowledges most crypto transactions are ‘legitimate’ but still anticipates additional sanctions

Wally Adeyemo, undersecretary of the US Department of the Treasury, said the department would likely impose more sanctions on companies involved in illicit transactions related to ransomware payments.

Speaking at an online event hosted by the Center for a New American Security with former Treasury Secretary Jack Lew and Ambassador Paula Dobriansky, Adeyemo said The United States government is likely to dive into its toolbox by employing sanctions when criminals threaten national security interests. He specifically mentioned as possible targets "cryptocurrency exchanges or mixers that are primarily in the business of promoting cybercriminals."

"Our view is that the vast majority of digital assets are being used for legitimate purposes, but for those who are primarily in the business of promoting criminal companies, we plan to use our tools to go after them," Adeyemo said. "We also have to admit to ourselves that ultimately the growth of digital assets is a challenge we have to address when it comes to our sanctions regimes."

Adeyemo added that any investigation into illicit crypto sanctions would include collaboration with the FBI, the intelligence community, and other agencies. His comments come after an Oct. 18 report that said the department needed to do more to develop its infrastructure and policies regarding digital assets as they were hampering the implementation of sanctions while balancing funds from legitimate humanitarian organizations. The report suggested that the US Treasury should be modernized to include "the right expertise, technology and personnel" to address digital assets.

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The government department has been applying sanctions as part of the United States' efforts to combat ransomware attacks that threaten the country's infrastructure, such as when it was established in Russia. DarkSide hackers attacked the Colonial Pipeline system In May. Last month, the department announced that it would impose sanctions on the Czech Republic, as well as the Russian company Suex OTC for allegedly allow hackers to access cryptocurrencies sent as payment for ransomware attacks.