Democratic Senator Elizabeth Warren is drafting a new crypto law that will restrict the use of cryptocurrency as a means of evading economic penalties. Warren’s new anti-crypto effort coincides with the US government’s push to eliminate the prospect of Russia utilising cryptocurrency to avoid economic sanctions imposed on the country.
According to an NBC News story from March 8, one of the key elements of Warren’s proposed crypto bill, which is still in draft form, will force local crypto exchanges to disclose “detailed records” of users’ names and transactions to private crypto wallets to the Treasury Department. It also intends to make corporations choose between doing business in the United States and doing business with sanctioned individuals and entities by imposing secondary penalties on overseas crypto exchanges.
Sen. Warren is crafting legislation she hopes will make it harder for Russia to use cryptocurrency to evade sanctions. https://t.co/EIrhOYwRJf
— NBC News (@NBCNews) March 8, 2022
According to NBC, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is also working on developing comparable rules based on Warren’s bill. For the past week or so, Alex Bornyakov, Ukraine’s deputy minister of digital transformation, has been calling for crypto exchanges to ban Russian users. However, top crypto exchanges such as Binance, Coinbase, and Kraken have all stated that they will not implement a blanket ban while emphasising their commitment to complying with US sanctions.
I'll be speaking soon with @Mitchellreports on @MSNBC about my new bill to ensure crypto isn't used by Putin and his cronies to undermine our economic sanctions. Hope you'll tune in! https://t.co/H8iTnA5Ulw
— Elizabeth Warren (@SenWarren) March 8, 2022
According to industry observers, Senator Warren has been very dubious of the sector for quite some time, and in 2021 alone, she described DeFi as the “most dangerous” component of crypto, proposed a bill to research crypto’s involvement in ransomware, and attacked the Ethereum network for its exorbitant fees during a committee hearing. So it’s no surprise that she’s taken advantage of the chance to press for stricter rules.
Warren, who was among a group of senators that wrote to Treasury Secretary Janet Yellen about the matter last week, Powell added that the scenario with Russia highlights the necessity for the industry to implement comprehensive regulatory frameworks to prevent these unbacked cryptocurrencies from functioning as a vehicle for terrorist funding and just general criminal conduct and tax evasion.
Earlier this week, FinCEN issued a warning to all financial institutions to remain watchful about Russia’s efforts to violate US sanctions, including a set of red flags to spot any evasion activities.
The methods listed included the use of corporate vehicles to conceal asset ownership and funding sources, shell companies to conduct international wire transfers, the use of third parties to conceal identity, and the use of newly established accounts to send or receive funds from a recognised institution.
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