March 2 (Reuters) – Senator Elizabeth Warren and three other
Democratic lawmakers on Wednesday urged the Treasury Department
to ensure the cryptocurrency industry is complying with
sanctions imposed on Russia, expressing concern that digital
assets could be used to undermine U.S. foreign policy goals.
In a letter sent to Treasury Secretary Janet Yellen, Warren
along with Senators Sherrod Brown, Mark Warner and Jack Reed
questioned whether the departments Office of Foreign Assets
Control (OFAC) had effective guidelines in place to enforce
sanctions compliance within the crypto industry.
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, the
letter said.
The United States has unleashed a slew of sanctions
targeting Russia’s banks, state-owned entities and elites, among
others, following the country’s invasion of Ukraine
The senators raised concerns that crypto wallets and dark
web marketplaces could enable sanctioned individuals to hide
their assets from public view.
Biden administration officials have said that they do not
believe Russia would be able to use cryptocurrency to completely
evade sanctions.
The scale that the Russian state would need to successfully
circumvent all U.S. and partners financial sanctions would
almost certainly render cryptocurrency as an ineffective primary
tool for the state, said Carol House, the director of
cybersecurity for the National Security Council, during a
webinar on Wednesday.
But the Democratic lawmakers said it was unclear whether
OFAC had appropriate guidelines to effectively monitor the
crypto industrys compliance with sanctions, noting that the
agency has become increasingly reliant upon voluntary
self-disclosure.
The senators asked that Treasury respond to a series of
questions by March 23 on the issue, and how the agency ensures
that crypto is not being used by maligned actors.
(Reporting by Hannah Lang in Washington; Editing by Cynthia
Osterman)