Following the Trump administration's decision to designate several cartels as foreign terrorist organizations, threats to the cryptocurrency industry have increased. These measures may lead to unforeseen consequences for the digital community.
Threats of Criminal Investigations
The biggest threat comes from the US Department of Justice, which has intensified measures against cartels using anti-terrorism laws. Prosecutors may pursue those they believe provide 'material support or resources' to terrorist organizations. This extends beyond providing physical weapons to any resources. Software developers and investors may be at risk of such accusations. There are precedents, such as the indictment of Tornado Cash developers for money laundering and sanction violations.
Increase in Civil Lawsuits
The number of civil lawsuits against cryptocurrency companies under the Anti-Terrorism Act (ATA) is also rising. Victims of terrorist attacks can sue those they believe support terrorists. Precedents, such as the recent lawsuit against Binance, show that crypto companies may face these issues if they are not cautious in their choice of business partners and transactions.
Need for Vigilance
Cryptocurrency companies must be especially vigilant in their international transactions to avoid becoming involved in criminal and civil litigation. When conducting transactions with FTOs and SDGTs, companies need to monitor changes in sanctioned lists and consider geographical risks. This will help avoid unintentional violations of anti-terrorism laws.
Changes in anti-terrorism policies may affect cryptocurrency companies, which must exercise increased caution in changing conditions. To avoid legal risks, they should continuously improve their internal compliance procedures and closely monitor changes in international sanctions.
