Thomas Daniels
Executives from Coinbase and Circle have urged U.S. regulators to take more decisive action against Tether and other offshore cryptocurrency companies that do not adhere to regulatory standards.
In a meeting with the House Financial Services Committee, Coinbase’s lead for Financial Crimes Legal, Grant Rabenn, highlighted the exploitation of foreign crypto platforms by criminals to circumvent the stringent anti-money laundering (AML) regulations enforced on U.S.-based exchanges.
Rabenn pointed out that while the Office of Foreign Assets Control (OFAC) has sanctioned a mere 560 cryptocurrency addresses, Coinbase’s investigations have identified over eight million addresses associated with nefarious activities. He attributed the facilitation of crypto-related crimes and money laundering in the U.S. to offshore exchanges and called for government action against these entities.
“Offshore platforms often engage in a game of jurisdictional evasion, sidestepping strict AML regulations and banking on regulatory indifference.” – Grant Rabenn, Coinbase’s Financial Crimes Legal Chief
Rabenn emphasized the necessity for the U.S. to utilize its comprehensive regulatory arsenal to target these non-compliant platforms, endorsing recent crackdowns in the crypto industry that highlight the importance of accountability.
Circle’s Chief of Global Policy and Regulatory Strategy, Caroline Hill, pushed for rigorous regulation of companies connected to the U.S. dollar, especially underscoring the need to integrate democratic values into USD-backed stablecoins. Hill specifically called attention to Tether’s main custodian, Cantor Fitzgerald, urging the government to use its existing authority to tackle any participation in financial crimes.
“I believe the Treasury Department has the capability to act against Tether, especially considering its U.S. connections, and I hope they are considering this with the seriousness it warrants.” – Caroline Hill, Circle’s Chief of Global Policy and Regulatory Strategy
She also raised concerns about the operational methods of stablecoin issuers, particularly those not employing preventive technologies like smart contracts to block the misuse of their digital tokens.
