WASHINGTON—The U.S. Treasury Department is moving toward addressing the anonymity of unhosted crypto wallets as part of President Biden’s larger strategy to tackle illicit finance involving digital assets, according to a new report.
Following two rules proposed by the Financial Crimes Enforcement Network in 2020 that enforce transaction reporting on unhosted wallet transactions exceeding $10,000, while also compelling banks to collect information on a customer and their counterparty for any transaction exceeding $3,000 involving an unhosted wallet.
U.S. Deputy Treasury Secretary Wally Adeyemo affirmed that the government agency has made progress, Be IN Crypto reported.
“…We are working to address the unique risks associated with unhosted wallets…Fundamentally, financial institutions need to know who they are transacting and doing business with to make sure they are not making payments to criminals, sanctioned entities, or others,” Adeyemo said, Be IN Crypto stated. “When it comes to unhosted wallets, we are working to provide them the information they need to avoid facilitating these kinds of illicit payments.
His remarks came during the Consensus 2022 meeting.
Increased Scrutiny
Increased scrutiny of unhosted wallets emerged after sanctions were imposed on the Russian Federation following its invasion of Ukraine. However, evidence is scant that Russians used crypto to skirt such sanctions, Be IN Crypto said.
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