Democratic US senators on Thursday introduced a bill that would allow the president to sanction foreign cryptocurrency companies that do business with sanctioned Russian entities and prevent them from transacting with US customers.
The Digital Asset Sanctions Compliance Act is led by Senator Elizabeth Warren and co-sponsored by 10 other Democrats, including Senators Mark Warner and Jon Tester.
While the bill is unlikely to become law any time soon, it could increase pressure on cryptocurrency exchanges, which have been on the defensive amid concerns from some lawmakers like Warren that digital assets are being used to fund an entire circumvent a series of Western sanctions imposed on Russia after its invasion of Ukraine.
Russian President Vladimir Putin “and his cronies can move, store and hide their wealth using cryptocurrencies, potentially evading historic economic sanctions imposed by the US and its partners around the world in response to Russia’s war against Ukraine,” said Ms Warren. in a statement.
The government officials have said they do not believe Russia could use cryptocurrencies to completely circumvent sanctions, citing the lack of liquidity in crypto markets to allow for high-volume transactions. Nevertheless, the Treasury Department has emphasized 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, a move major crypto exchanges such as Coinbase and Kraken have said they will not. would take without a legal requirement.
The bill would also require the Treasury to publicly identify foreign crypto trading platforms deemed to be at high risk for sanctions evasion and money laundering, and would require US taxpayers to make offshore crypto transactions in excess of $10,000. to report.
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