The U.S. and its foreign allies must work together to create shared standards for regulating cryptocurrencies to make it harder for bad actors to get away with crimes, the U.S. Treasury said Thursday.

"Uneven regulation, supervision, and compliance across jurisdictions creates opportunities for arbitrage and raises risks to financial stability and the protection of consumers, investors, businesses, and markets," Treasury said in a news release. Inadequate anti-money laundering (AML) and terrorism financing rules across different countries make it harder for the U.S. to investigate illicit transactions when money flows offshore, such as with ransomware payments, the department said.

The need for shared standard-setting was one of the topics addressed in a framework for international cooperation that the department said it delivered to President Joe Biden on Thursday. Treasury was directed to develop the framework—in coordination with other agencies like the State and Commerce Departments—under the White House's March executive order calling for an government-wide strategy for digital assets.

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