The US Department of Treasury is seeking the opinion of the public regarding risks of illicit finance as well as national security related to digital assets.
The department warned that digital assets are being widely used for financial activities and this increases the risk of crimes, such as proliferation and terrorist financing, corruption, money laundering and theft, and fraudulent schemes.
On Tuesday, the Department of the Treasury published a notice in which it invited members of the public to share their input.
This was regarding the action plan that had been released in response to the executive order that had been issued by US President Joe Biden on March 9th, 2022.
The notice said that not only did they want comments on the action plan developed for ensuring the responsible development of these digital assets, but also on the national security and illicit finance risks.
The notice further stated that the Treasury was willing to listen to any input that the commenters think is relevant to their ongoing efforts for assessing the risks of illicit finance associated with digital assets.
They were also ready for comments that could help them in improving their efforts in terms of mitigating the risks involved.
The public is allowed to share their comments on the matter until November 3rd.
The Treasury had detailed that the growing use of these digital assets in financial activities has resulted in plenty of risks.
These include money laundering, fraudulent schemes, corruption, theft, terrorist financing and proliferation financing as well.
It went on to say that it is because of these risks that digital assets need to be scrutinized, not for stopping innovation but to ensure these risks can be mitigated.
It also said that opportunities need to be explored for this purpose and this requires oversight, regulation, law enforcement, private-public engagement and supervision.
The questions that the Treasury has put forward are regarding the risks of illicit finance associated with digital assets, non-fungible tokens (NFTs), peer-to-peer technologies and decentralized finance (DeFi).
The risks that are explored in the question are that of CFT/AML solutions, global implementation of these standards, central bank digital currencies (CBDCs), private sector engagement and supervision and regulation.
One of the most important questions is about how the Treasury can ensure the consistent implementation of the global anti-money laundering (AML) and countering financing of terrorism (CFT) standards for digital assets across various jurisdictions.
Moreover, the Treasury has also questioned whether the public wants the US government to focus on some specific jurisdictions or countries in order to boost their CFT and AML regimes.
This is relevant to virtual asset service providers (VASPs). The purpose of asking for public opinion is to ensure that the US government can come up with proper regulation for the crypto sector.
There are already several bills that are scheduled for review in Congress and it is likely that regulations will soon be developed in order to oversee the growing crypto industry.