Senator Elizabeth Warren (D-MA) is preparing a bill in response that Russian citizens may be using cryptocurrencies to evade sanctions. The , which was first reported by NBC, will require banks and other financial institutions to identify customers and transfer funds to personal wallets, and regularly report the information to the Treasury Department. But crypto companies insist that there is no evading sanctions on their exchange.
Although the text of the bill has yet to be released, NBC reports that one of the provisions resembles a rule proposed by the Treasury Department that requires banks to regularly identify suspicious transactions they believe is involved in sanctions evasion. If passed, the law will codify the rule.
Lawmakers worry that the Treasury Department’s Office of Foreign Assets Control lacks the opportunity to track down crypto criminals. ONE by Warren and three other Democrats in the Senate asking the Treasury Department to list ways it plans to combat sanctions evasion through cryptocurrency platforms, including how it has plans to work with foreign governments. The senators also detailed methods they suspect the Russians are using to bypass sanctions, including using the dark web to transfer money, and the New Central Bank of Russia .
After 9/11, the PATRIOT Act was passed requiring banks and financial institutions to customer identification programs. Requiring banks to disclose suspicious transactions to private crypto wallets is even if it disagrees with some parties.
The cryptocurrency industry, which largely considers anonymity (or at least the lack of government intervention) as one of its central tenets, is arguably less enthusiastic. While Coinbase, Binance and Kraken with government officials to ensure individuals targeted by the sanctions do not use their platforms, they refused to ban Russian accounts outright.
Cryptocurrency platforms also claim that widespread Russian sanctions evasion simply did not happen. An example: recent Coinbase that it blocked 25,000 crypto addresses that it believed belonged to Russians engaged in illegal activity, but also added that it had identified the majority of them before Russia’s invasion of Ukraine. Furthermore, Coinbase said it did not notice an increase in new illegal activity following the sanctions against Russia.
Blockchain data platform Chainalysis recorded a significant mark in crypto transactions using the Russian ruble and the Ukrainian hryvnia in the last week of February, as well as as Russia made its way into Ukraine. However, the platform was quick to point out that in the potentially illegal transaction could also be because the average Ukrainian and Russian buy cryptocurrencies in order to while both fiat currencies depreciated.
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