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US Senator Elizabeth Warren creates bill that combines Russia sanctions with crypto wallet tracking

As Russia’s invasion of Ukraine continues, US Senator Elizabeth Warren proposed a new bill on Thursday that improves and expands the enforcement of sanctions against the country, its entities and personnel, particularly when the subject is the use of cryptocurrencies.

US Senator Elizabeth Warren creates bill that combines Russia sanctions with crypto wallet tracking

US Senator Elizabeth Warren creates bill that combines Russia sanctions with crypto wallet tracking

“The Digital Asset Sanctions Compliance Enhancement Act of 2022” was introduced by the Massachusetts state senator on Thursday (17) during a Senate Banking Committee hearing.

The bill improves the ability of President Joe Biden and the US government to take action against brokerages that transact with Russian addresses, among other provisions.

Last week, Warren, a longtime critic of cryptocurrencies, had suggested via Twitter that he was working on a bill to “ensure crypto is not used by Putin and his cronies to undermine our economic sanctions.”

The proposed law would give Janet Yellen, US Treasury Secretary, “obvious authority” to block US-based cryptocurrency exchanges and payment operators from facilitating transactions with wallets that are or are believed to be based outside of Russia.

Additionally, the bill gives Biden the ability to issue secondary sanctions against Russian agents who help people and entities in the country avoid sanctions through cryptocurrencies.

However, the bill also has a proposal that could impact some US crypto users.

Will require any U.S. taxpayer to declare cryptocurrency transactions valued at or above $10,000 to a foreign entity to the U.S. Treasury’s Financial Crimes Combat Network (or FinCEN), effectively identifying such private cryptocurrency wallets. .

“Putin and his cronies can move, store, and hide their wealth using cryptocurrencies, potentially allowing them to evade the historic economic sanctions the U.S. and its partners across the world have levied in response to Russia’s war against Ukraine,” Warren said in a recent statement. .

Warren introduced the bill along with Jack Reed, chairman of the Senate Armed Services Committee; Mark Warner, chairman of the Senate Intelligence Committee and Jon Tester, chairman of the Senate Defense Appropriations Subcommittee.

It is also co-sponsored by seven other US senators (all from the Democratic Party).

The ability of cryptocurrencies to be used by Russia and President Vladimir Putin to evade financial sanctions has been a major talking point since the invasion of Ukraine began on February 24.

However, there has been significant debate as to whether Russia can secretly transact huge volumes of cryptocurrencies in secret.

While so-called bitcoin (BTC) mixing services can help obfuscate transactions, as well as privacy-focused currencies like monero (XMR) and zcash (ZEC), most cryptocurrency transactions are publicly visible on the blockchain.

Companies such as Chainalysis and Elliptic specialize in deciphering this data and making connections between portfolios to identify potential bad actors in the industry.

At Thursday’s hearing, Jonathan Levin, co-founder of Chainalysis, told senators that the company “found no evidence that Russia or Putin are systematically using cryptocurrencies to evade sanctions,” according to a Bloomberg article.

Coin Center, a Washington-based advisory group, rebuked Warren’s bill, arguing that the vague description of the legislation “may implement sweeping restrictions on the cryptocurrency ecosystem under the guise of tightening sanctions against Russia for its unlawful encroachment.” justified from Ukraine”.

In a post co-written by Jerry Brito and Peter Van Valkenburgh, the crypto lobby group further stated that the proposed bill would indiscriminately punish software developers, network operators and cryptocurrency miners.

“This is unnecessary, excessive and unconstitutional,” the group said.

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