Without explicitly naming Tether (USDT) as the sector’s leader, a top official from the U.S. Department of the Treasury took a shot Wednesday at the dangers of non-U.S. stablecoin issuers that use dollar backing, arguing they need to address their use by bad actors.

Deputy Secretary of the Treasury Wally Adeyemo issued a wide-ranging warning about illicit finance in the crypto industry in a speech he’s set to deliver at a Blockchain Association event in Washington. He aimed some of that attention at stablecoins. “We cannot allow dollar-backed stablecoin providers outside the United States to have the privilege of using our currency without the responsibility of putting in place procedures to prevent terrorists from abusing their platform,” he said in the prepared remarks.

Adeyemo referenced his earlier speech at CoinDesk’s Consensus 2022 that highlighted crypto as a “tremendous opportunity” for innovation, pointing out he “also made clear the importance of industry proactively taking steps to prevent digital assets from being used by transnational criminal organizations, terrorists, and rogue states.” That opening, however, hasn’t been fully embraced by the industry, he said today. “While some have heeded our calls and taken steps to prevent illicit activity, the lack of action by too many firms – both large and small – represents a clear and present risk to our national security,” Adeyemo said.

Also on Wednesday, the Treasury sanctioned another crypto mixing service – Sinbad – saying it supported transactions tied to North Korean hacking.

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