OPINION:
Peace through strength is a bedrock doctrine ensuring that America remains the world’s sole superpower.
Our military superiority protects the homeland against foreign adversaries such as Iran and North Korea, which search for any vulnerability in our defenses, including our financial system, to threaten America’s national security. So why is Congress considering a cryptocurrency bill that would weaken our financial defenses and create new ways for our enemies to exploit digital currency to fund illicit activity?
The current version of the Digital Asset Market Clarity (CLARITY) Act does exactly that. With a full Senate floor vote still pending, the proposal exempts crypto exchanges from investor safeguards and carves out decentralized finance from anti-money laundering and know-your-customer requirements that have protected U.S. financial markets for decades.
We maintain military pressure and sanctions regimes specifically to constrain our adversaries. Yet this legislation offers sanctioned entities a direct pathway into our markets by making it easier for them to move illicit funds through crypto exchanges while operating in the shadows.
Federal prosecutors and sanctions officers, including the Treasury Department’s Office of Foreign Assets Control, will be restricted in the tools they need to track illicit transactions, investigate foreign hackers moving stolen funds and hold cybercriminals accountable.
Supporters often point to the bill’s 24 national-security-related provisions as evidence that these risks have been addressed, but this claim falls apart under scrutiny.
Nearly half of those provisions are merely studies, eight simply codify authorities the government already has, four are exemptions, and only two create new authorities, none of which meaningfully address illicit finance activity in decentralized finance. Nor, for that matter, has the U.S. Securities and Exchange Commission stepped in to address enforcement gaps for digital assets.
In fact, the agency’s pending innovation exemption and recent token taxonomy are cause for further concern. Should the SEC permit security tokenization without issuer consent, foreign adversaries will have yet another route to evade sanctions and bypass enforcement by the Office of Foreign Assets Control.
American innovation is not secured by granting our adversaries direct access to purchase and manipulate critical U.S. financial assets.
If policymakers bypass core safeguards for digital assets, we risk worsening the serious national security threats we face today. Foreign adversaries are already exploiting emerging technologies, financial networks and regulatory gaps to defraud Americans and undermine our national security. Sanctions, for instance, are among our most critical national defensive tools. Yet adversaries are increasingly using illicit crypto supply chains to evade our sanctions at scale.
Illicit crypto addresses received at least $154 billion in 2025 — a 162% increase from the previous year and a 694% increase in funds received by sanctioned entities. Threats from terrorists in Iran and state-sponsored hackers in North Korea demonstrate the scale of the challenge.
In 2025, North Korea stole more than $2 billion in crypto assets, most of which was used to fund its weapons program. Iran exploits digital currencies and shadow banking networks to bypass U.S. sanctions and provide a financial artery supporting the Islamic Revolutionary Guard Corps, according to a May report from the Treasury Department’s Financial Crimes Enforcement Network.
Iranian bad actors are already extorting tolls in the Strait of Hormuz exclusively in crypto.
Without stronger enforcement, expect this pattern of crypto abuse to spread among rogue nations. These actions are a direct challenge to U.S. authority and the global financial standards that have long underpinned American power. They also send a dangerous message: U.S. rules, sanctions and enforcement tools are merely suggestions if adversaries can find the right digital pathway.
We cannot afford that outcome.
As digital asset threats to our national security intensify, we must choose between responsible innovation with strong safeguards and weak rules for digital assets — rules that favor our enemies and harm American innovation and competitiveness.
Congress must explicitly grant law enforcement the authority and tools needed to disrupt the financial infrastructure that enables cybercriminals and sanctioned entities to move illicit funds undetected. If it does not, the same adversaries moving stolen funds and defrauding Americans will have a clearer path to continue their crimes.
America can lead in innovation, but only if we reject enforcement gaps in decentralized finance and build strong, modern defenses that protect our financial and national security. This — not backdoors that allow our adversaries to control the future of financial innovation — is the path to American competitiveness and strength.
• U.S. Air Force Brig. Gen. John Teichert (retired) is a leading expert on foreign affairs and military strategy. He served as commander of Joint Base Andrews and Edwards Air Force Base, was the U.S. senior defense official to Iraq, and recently retired as the assistant deputy undersecretary of the Air Force for international affairs.
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