Monday, October 3, 2022
HomeLaw & PoliticsSenator Warren new crypto law to restrict cryptocurrency as way to evade...

Senator Warren new crypto law to restrict cryptocurrency as way to evade economic sanctions

Senator Elizabeth Warren's new crypto law would mandate local crypto exchanges to send "detailed records" of users' names and transfers to private crypto wallets to the Treasury Department if passed.

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.

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.

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.

Read more:

Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

five × three =

- Advertisment -

Most Popular