U.S.-based blockchain startup releases strategy for combating illegal cryptocurrency activity


  • Steps that the US government can do to curtail illegal crypto activity were outlined in the Chainalysis report.
  • US authorities may be able to close a significant enforcement gap if they focus on sanctions.
  • There are hundreds of research papers, infographics, and projections on the banking business published by Insider Intelligence every year. Find out how to sign up as a customer.

Blockchain fintech Chainalysis, which provides investigative and compliance solutions, has announced that the US government can take efforts to curtail sanctions evasion and other unlawful actions involving cryptos.

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Insider Intelligence

Jonathan Levin, the company's co-founder and chief strategy officer, testified before the Senate Banking Committee on the company's initiatives.

The following ideas have been put forth: Levin's evidence was framed by the sanctions imposed by the United States following Russia's invasion of Ukraine, which he discussed in detail.

Cryptocurrency exchanges and mixers might be added to the list of organizations subject to fines because they facilitate illegal activity. To back up his argument, Levin referenced the designations of Chatex and SUEX as precedents.

Individuals' digital wallet addresses should be included in sanctions designations, so that funds to the wallets can be blocked.

Improve the government's understanding of current dangers through increasing the exchange of information.

In addition, four long-term strategies were advocated by Levin to better combat criminal operations based on cryptography in general:

Support for the development of technologies and personnel that may be used in the investigation of blockchain-related crimes. Financial Crimes Enforcement Network and Terrorism and Financial Intelligence (TFI) are two Treasury Department agencies that will get the money (FinCEN).

Legislative support for entities tasked with tracking down and disrupting unlawful crypto activity.

Assist market regulators, such as the SEC and CFTC, in determining their jurisdictional authority in the digital asset arena by providing them with clarity.

Create a Virtual Asset Coordination Center to help government agencies better coordinate their efforts in the area of space planning and procurement.

This is the most important takeaway: Chainalysis' recommendations contribute to the current debate on how to regulate crypto. The asset class's "Wild West" image can be shattered and it will become more mainstream with better consumer protections in place.

Companies or individuals hesitant of participation in the crypto market may be reassured if market authorities are given dedicated funds and resources.

This might assist US authorities address a fundamental enforcement vacuum, which is the ambiguity about how much crypto exchanges are aiding Russian sanctions evasion by the US.

Democratic senators introduced legislation the next week to target cryptocurrency corporations that aid in Russian sanctions evasion.

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