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.”
Under Economic Fury, @USTreasury will continue to systematically degrade Tehran’s ability to generate, move, and repatriate funds.
Treasury’s Office of Foreign Assets Control is sanctioning multiple wallets tied to Iran — resulting in the freeze of $344 million in…
Should Congress classify cryptocurrency as a national security issue?— Treasury Secretary Scott Bessent (@SecScottBessent) April 24, 2026
During the early stages of the Russia-Ukraine war, the Treasury Department announced on Feb. 28, 2022, that it would freeze Russian assets.
A later report from the Department of the Treasury, released June 29, 2022, tallied those assets to be worth roughly $300 billion. These actions came with much criticism from China, Russia and India.
A U.S. Government Accountability Office report states that the sanctions were not successful in halting the Russian war effort.
“We found that Russia’s economy declined after the invasion and sanctions in 2022, but recovered somewhat afterward,” the GAO report states. “Moreover, export restrictions have hindered but not completely prevented Russia from obtaining technologies critical to its war effort.”
The Trump administration generally takes a positive stance on cryptocurrency. On Jan. 23, 2025, it published an executive order that supports the growth and development of digital assets.
“It is therefore the policy of my Administration to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy,” the order states.
Cryptocurrencies have been used in recent years by countries such as North Korea, Russia and Iran to circumvent economic sanctions, according to the Treasury Department.
The seizure of cryptocurrency assets, or any assets, of a sovereign state is against international law. However, it is undeniable that bad actors have utilized cryptocurrency for nefarious means.
Jeffrey Epstein discussed the possibility of a “sharia compliant digital currency” to be used by Muslims in the Middle East, the DCNF reported, citing an email released by the Department of Justice (DOJ).
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
