Senator Elizabeth Warren (D-Mass.) is working on legislation to make it more difficult to utilize cryptocurrency to avoid punishment.
The bill, which is still in draft form, has gained additional immediacy as bipartisan fears rise that members of Moscow’s elite may be able to avoid sanctions by utilizing digital currency.
By imposing secondary sanctions on global crypto exchanges, it hopes to compel corporations to choose between doing business in the United States and doing business with sanctioned individuals and entities.
Last week, Warren and the chairs of 3 major Senate committees discussed the issue with Treasury Secretary Janet Yellen, asking for data on the Treasury Department’s enforcement of Russia sanctions compliance by the sector.
Warren wrote in a letter signed by Intelligence Committee Chairman Mark Warner of Virginia, Banking Committee Chairman Sherrod Brown of Ohio and Armed Services Committee Chairman Jack Reed of Rhode Island:
“Strong enforcement of sanctions compliance in the cryptocurrency industry is critical given that digital assets, which allow entities to bypass the traditional financial system, may increasingly be used as a tool for sanctions evasion,”
Russia’s central bank and military sector, as well as President Vladimir Putin and prominent members of his inner circle, have all been sanctioned by the Biden administration.
While the government has the authority to inflict crypto sanctions alone, Warren’s bill may be used to create pressure, similar to how Congress has increased calls for President Joe Biden to limit Russian oil imports.
Lawmakers on all sides of the aisle are worried that cryptocurrency is developing as a means of circumventing existing restrictions.
Sen. Lindsey Graham, R-S.C., said last week after a classified briefing on Ukraine:
“Cryptocurrency is rearing its ugly head here. As you sanction the [Russian] central bank, which is a good thing, I worry about how the cryptocurrency could be used by the Russians to stay afloat.”
According to a Treasury official, the Treasury Department is still convinced that the measures in place will be effective.
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