Esper Frames Crypto Regulation as National Security Imperative

Former US Secretary of Defense Mark Esper has penned an op-ed in the Financial Times arguing that the Digital Asset Market Clarity Act is a national security imperative for crypto regulation. He claims that countries like North Korea and China are exploiting digital assets for illicit purposes, and the US regulatory framework hasn't kept pace.

The bill, which has already cleared significant legislative hurdles, would extend the Bank Secrecy Act's anti-money-laundering and know-your-customer requirements to digital-commodity brokers. It would also bring Treasury's Section 311 authority into play for digital assets, a tool historically used to cut off foreign banks and financial institutions from the US system when they're tied to money laundering or terrorism financing.

Esper argues that clearer regulations would give US intelligence and law enforcement better visibility into financial flows. He cites North Korea's Lazarus Group, which has been linked to some of the largest crypto heists in history, funneling stolen digital assets into the regime's weapons programs.