Federal Lawmakers Worry Russian Leaders Are Using Cryptocurrencies To Avoid Sanctions
U.S. federal lawmakers are expanding their efforts to track potential cryptocurrency use by Russian leaders and oligarchs to evade sweeping sanctions imposed on the country in response. pay the invasion of Ukraine. Economic advisers and crypto researchers have warned that bitcoin and other currencies could be used to fund Russia’s war efforts and protect the wealth of financiers. tycoon of this country.
In a letter With Treasury Secretary Janet Yellen on Wednesday, a group of senators, including Elizabeth Warren and Senate Intelligence Committee Chairman Mark Warner, asked about the agency’s plans to monitor cryptocurrency networks. to find evidence of Russian leaders transferring money and enforcing sanctions compliance. “Criminals, rogue states, and other actors can use digital assets and alternative payment platforms as a new means of concealing cross-border transactions for illicit purposes. main,” the senators wrote, quoting from the Treasury Department Report for 2021 that has warned about the ability of cryptocurrencies to undermine the effectiveness of US sanctions.
Last year, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued guidance to assess and mitigate the risks posed by the cryptocurrency market to sanctions. One OFAC . Report asked technology companies and crypto users to refuse to engage in “transactions with blocked persons or assets.”
This new letter reiterates similar concerns and asks specifically how OFAC is working with foreign governments to enforce its guidelines and what barriers have prevented OFAC from doing so.
At the same time as the letter was sent, US Attorney General Merrick Garland announced a new interagency task force, KleptoCapture, that would be dedicated to enforcing sanctions and other economic restrictions imposed by the United States. The period applied to Russia. “The Task Force will be fully empowered to use the most advanced investigative techniques, such as tracing cryptocurrencies, to arrest and prosecute individuals found to be infringing, Notice notice.
While these coincidental announcements do not appear to be a joint effort, together they mark the most formal attempt to investigate the role of crypto networks in Russia’s attack on Ukraine.
During the last week, Ukraine asked crypto exchanges to lock down all Russian accounts. “It is important to freeze not only addresses associated with Russian and Belarusian politicians, but also sabotage ordinary users,” said Mykhailo Fedorov, Ukraine’s minister of digital transformation, tweeted on Sunday.
Until now, the crypto industry has largely ignored or condemn calls for a freeze on Russian holdings. Changpeng Zhao, founder of the world’s largest cryptocurrency exchange Binance, told BBC Radio 4 that the company “has no sanction status, such as against many people,” and said Binance will only respond to requests involving specific individuals. Another major exchange, Coinbase, tell Motherboard that it would not comply with Ukraine’s request in the interests of “economic freedom.”
Bloomberg reported that the White House National Security Council and the Treasury Department also asked exchanges to support their efforts. And while crypto networks appear to unilaterally oppose mass bans, companies like Coinbase working with the Biden administration to block the accounts of Russians targeted by sanctions.