U.S. Treasury Department says Russia, North Korea, Al-Qaeda, Hamas use virtual currencies to evade sanctions

Reuters reported the information.

U.S. Deputy Treasury Secretary Wally Adeyemo, in a statement prepared for a hearing before the Senate Banking Committee, warned that groups such as al-Qaeda, Hamas, Russia and North Korea are finding new ways to hide their identities and move resources using virtual currencies.

Adeyemo noted that the U.S. Treasury Department has demonstrated some success in rooting out illicit financial transactions in the digital ecosystem, but stressed that states need to expand enforcement to prevent similar activities by "malign actors."

"While we continue to assess that terrorists prefer to use traditional financial products and services, we fear that without congressional action to provide us with the necessary tools, the use of virtual assets by these actors will only grow," Adeyemo said.

According to the official, North Korea has been able to purchase, launder and store illicit proceeds through sophisticated cyber heists, relying on anonymity-enhancing technologies to hide the sources of the funds.

Adeyemo also mentioned that the Treasury Department has observed Russia's growing reliance on alternative payment methods to evade sanctions and fund its military campaign against Ukraine.

The U.S. Treasury deputy secretary called on Congress to pass legislation to strengthen its tools to pursue such entities, including secondary sanctions targeting foreign providers of digital assets that facilitate illicit financing.

Such tools will help the Treasury develop its targeting capabilities to combat overseas cryptocurrency exchanges and some financial services that do not use correspondent accounts.

He also called for action to close gaps in existing authorities by expanding them to include explicit coverage of entities such as virtual asset wallet providers and cryptocurrency exchanges that have sprung up since the current laws were passed.

• Earlier, U.S. Treasury Secretary Janet Yellen ended four days of talks in China by warning the country's banks and exporters of the consequences if they help strengthen Russia's military capabilities.