Senator Elizabeth Warren and three other Democratic legislators urged the Treasury Department on Wednesday to guarantee that the cryptocurrency sector complies with Russian sanctions, citing worry that digital assets may be used to harm US foreign policy aims.
Warren, along with Senators Sherrod Brown, Mark Warner, and Jack Reed, wrote to Treasury Secretary Janet Yellen, questioning whether the department’s Office of Foreign Assets Control (OFAC) had appropriate rules in place to enforce sanctions compliance inside the crypto business.
“Strong sanctions compliance enforcement in the cryptocurrency business is vital given that digital assets, which allow organizations to bypass the traditional financial system, may increasingly be utilized as a weapon for sanctions evasion,” according to the letter.
In response to a letter from four Senate Democrats voicing concerns about Russia’s possible use of cryptocurrencies to escape sanctions, Treasury Secretary Janet Yellen stated that the US will keep a close eye on the issue.
Following Russia’s invasion of Ukraine, the US imposed a raft of sanctions on its banks, state-owned enterprises, and elites, among others.
Senators expressed worry that cryptocurrency wallets and dark web markets might allow sanctioned persons to conceal their assets from public scrutiny.
Officials in the Biden administration have stated that they do not believe Russia will be able to avoid sanctions by using cryptocurrencies totally.
“The scale that the Russian state would need to successfully circumvent all US and partner financial sanctions would almost certainly render cryptocurrency as an ineffective primary tool for the state,” said Carol House, the National Security Council’s director of cybersecurity, during a webinar on Wednesday.
However, Democratic senators raised concerns about OFAC’s ability to adequately oversee the crypto industry’s compliance with sanctions, adding that the agency has grown “increasingly reliant on voluntary self-disclosure.”
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