A national security group is calling on Congress to treat cryptocurrency as a national security issue rather than an economic concern.
The Senate is currently considering the CLARITY Act, a bill that would tighten regulations on cryptocurrency both domestically and abroad. As the Senate deliberations continue, POLARIS National Security released a memo, obtained exclusively by the Daily Caller News Foundation, that makes five policy recommendations for Washington.
“While traditional methods still account for the majority of global illicit finance, cryptocurrency is growing rapidly and offers distinct advantages, including speed, cross-border accessibility, and reduced reliance on the formal banking system,” the executive director of POLARIS National Security, Sebastian Borda, told the DCNF. “It is not yet the primary channel for global illicit finance, but its trajectory and utility for certain actors make it a rising national security concern.”
It also urges senators to expand enforcement tools aimed at sanctions evasion, increase oversight of U.S. adversaries and to close gaps that allow offshore accounts to move illicit funds.
“Illicit actors often route funds through multiple layers to obscure their origin, so the problem rarely sits in one place,” Borda told the DCNF. “That makes U.S. action all the more important. The U.S. should not allow platforms or exchanges within its jurisdiction — and within its ability to regulate — to become exploitable links in that chain.”
The central message of the policy recommendation is that cryptocurrency firms operating in the U.S. should be subject to the same regulations as banks.
Cryptocurrency is also used by ransomware hackers to process payments that are beyond the reach of law enforcement and banks, the POLARIS report states, citing a press release from the Treasury Department.
The U.S. government has targeted cryptocurrencies favored by adversarial nations, with Iranian assets being recently frozen.
“Treasury’s Office of Foreign Assets Control is sanctioning multiple wallets tied to Iran — resulting in the freeze of $344 million in cryptocurrency,” Treasury Secretary Scott Bessent said in a post on X. “We will follow the money that Tehran is desperately attempting to move outside of the country and target all financial lifelines tied to the regime.”