US Pushes Cryptocurrency Exchange Firms To Comply With Sanctions More For Russia

Senator Elizabeth Warren, increasingly insists on sanctions for Russia. (photo: twitter @SenWarren)

JAKARTA – US Democratic senators introduced a new law on Thursday, March 17 that will allow the president to sanction foreign cryptocurrency companies. Especially those who do business with Russian entities that are subject to sanctions and prevent them from transacting with customers in the US.

The Digital Asset Sanctions Compliance Act is chaired by Senator Elizabeth Warren and co-sponsored by 10 other Democratic senators. Including Senators Mark Warner and Jon Tester.

We can't allow Putin & his cronies to hide their wealth & evade economic sanctions using cryptocurrency. My new bill w/@SenJackReed, @MarkWarner, @SenatorTester & colleagues would close this potential avenue for evasion & ensure Russia is held accountable.https://t.co/EqHsWIKKLS

— Elizabeth Warren (@SenWarren) March 17, 2022

The bill is unlikely to become law anytime soon, but it could increase pressure on cryptocurrency exchanges. Most notably they have been on the defensive amid concerns from some lawmakers like Warren. Senators fear that digital assets are being used to evade some of the Western sanctions imposed on Russia following its invasion of Ukraine.

“Russian President Vladimir Putin and his cronies can transfer, store and hide their wealth using cryptocurrencies. This could potentially allow them to evade the historic economic sanctions the US and its partners have imposed around the world in response to Russia's war against Ukraine," Warren said in a statement.

Biden administration officials also said they did not believe Russia could use cryptocurrencies to completely evade sanctions. One of the reasons is the lack of liquidity in the cryptocurrency market to facilitate high volume transactions. However, the US Treasury has stressed that digital asset companies are required to comply with the sanctions.

Warren's bill would also allow the Treasury Secretary to block digital asset platforms operating in the United States from transacting with Russian crypto users anywhere. This is a move that major cryptocurrency exchanges such as Coinbase and Kraken say would not be possible without legal requirements.

The bill would also require the Treasury Department to publicly identify foreign cryptocurrency trading platforms it deems to be high risk for sanctions evasion and money laundering. They will require US taxpayers to report any overseas crypto transactions that exceed 10.000 (IDR 143 million).