The US Treasury Department, led by Deputy Secretary Wally Adeyemo, is intensifying its focus on the regulation of cryptocurrencies, particularly in the context of illicit financing and national security. Adeyemo is set to testify before the Senate Banking Committee, emphasizing the need for Congress to pass new regulatory tools to combat the misuse of digital assets by terrorist groups and other 'malign' actors. This comes amid a broader legislative push, highlighted by a new proposal by Senators Thom Tillis and Bill Hagerty, aimed at establishing a 'Digital Asset FI' regulatory regime. The Treasury's call for enhanced enforcement powers against foreign crypto service providers underscores the administration's concern over the potential increase in terrorist use of virtual currencies without adequate legislative action.