The United States Department of the Treasury has announced that it can begin adding the cryptocurrency addresses of the people included in the blacklist to its list of sanctions as reported in the Wall Street Journal.
Treasury to sanction the addresses of Crypto
Along with a white house order signed by President Donald Trump that prohibits Americans from trading in the new Venezuelan digital currencies, the Treasury Department announced that it is examining the process of listing cryptocurrency addresses of people suspected of using technology for purposes criminals to “alert the public”.
The Treasury Department continued advising that companies, exchanges and individuals to develop a customized compliance program with respect to their involvement with the cryptocurrency; “There is not a single compliance program or adequate solution for each circumstance”
A Treasury spokesman said his process of adding cryptocurrency addresses to his sanctions list would be a process similar to his typical research work combining law enforcement agencies with public and classified information sources to find his target.
He added that the list of sanctions would be used “as a complement to existing tools”, already existing to identify and prosecute those who use digital currency to perpetuate criminal activity. The announcement comes as the financial leaders of the G20 meeting in Buenos Aires are scheduled to discuss how to fight against criminal activity based on cryptocurrencies.
The directions are the same as the physical assets
Dave Murray, former senior adviser to the undersecretary of the Treasury for terrorism and financial intelligence, commented that the use of digital currency addresses “may be the most reliable identifier” in tracking down those who use technology for criminal purposes.
“Although people will probably stop using an address once it has been included in the list, the addresses will be extremely valuable to financial institutions,” said Mr. Murray, who now works for the Financial Integrity Network before adding;
“They can use the addresses to build the network of the authorized person and potentially identify the new address used by an authorized person.”
Opponents argue that the identification of an address used in a cryptocurrency transaction does not reveal the source of the funds. So, in many cases, tracking the token to a recipient can generate a facilitator or broker, but it’s rarely the kind of bad actor that the Treasury Department is really looking for.
Proponents, such as Paul Hastings, argue that the sanction can inhibit prohibited transactions just as when the physical assets of an offender are seized as sanctioned property. The cryptocurrency is “another kind of property … As in the case of ships, [the Treasury] will identify certain species of digital currency issued by prohibited actors,” said attorney Scott Flicker, partner of Paul Hastings LLP.