The United States is concerned about the risks posed by self-custody or unhosted crypto wallets, according to the U.S. Treasury’s Deputy Secretary, Wally Adeyemo.
Adeyemo says the U.S. Treasury is taking action to prevent the use of self-custody crypto wallets in facilitating illicit payments across the globe.
“We are working to address the unique risks associated with unhosted wallets. Because unhosted wallets are effectively just addresses on a blockchain, it can be difficult to determine who really owns and controls them – creating opportunities to abuse this heightened anonymity.
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 says the U.S. Treasury plans to offer unhosted crypto wallets the information necessary to help them block blacklisted or sanctioned individuals and entities from transacting.
“When it comes to unhosted wallets, we are working to provide them the information they need to avoid facilitating these kinds of illicit payments.”
According to the U.S. Treasury Deputy Secretary, the various stakeholders in the crypto asset space share the same goals.
“It is critical that we balance both sides of this proverbial digital coin, the risks and the opportunities. And I believe that when it comes down to it, we as policymakers and you as investors, builders, and innovators in digital assets want the same things:
To foster innovations that bring better technology and better financial services to consumers and businesses, especially those who have traditionally been underserved or excluded;
To provide appropriate consumer and investor protections;
To ensure financial stability; and
To root out crime, fraud, and other abuse from the financial system we collectively depend on.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Yevheniia Rodina/Natalia Siiatovskaia/maksum iliasin