Yesterday, Senate Intelligence Committee Chairman Mark Warner (D-VA), Sen. Elizabeth Warren (D-MA), Senate Armed Services Committee Chairman Jack Reed (D-RI), and Senate Defense Appropriations Subcommittee Chair Jon Tester (D-MT) introduced the Digital Asset Sanctions Compliance Enhancement Act to ensure that Vladimir Putin and Russian elites don’t use digital assets to undermine the international community’s economic sanctions against Russia following its invasion of Ukraine. The senators’ bill comes amid bipartisan concerns and warnings by federal agencies that Russian actors may try to evade economic sanctions by using digital currencies. Countries hit hard by sanctions, including North Korea and Iran, have been previously found to use cryptocurrency to curb the effects of economic sanctions. This legislation is cosponsored by Sens. Tammy Duckworth (D-IL), Debbie Stabenow (D-MI), Raphael Warnock (D-GA), Chris Van Hollen (D-MD), Tina Smith (D-MN), Catherine Cortez Masto (D-NV), and Bob Menendez (D-NJ).
“In order for the sanctions levied by the United States and our allies to have the maximum impact on Vladimir Putin and his oligarch friends, we must close off avenues they might use to evade those sanctions. This legislation will crack down on foreign actors who help sanctioned Russians use digital assets like cryptocurrencies to circumvent the crippling measures we’ve put in place to punish Russia for its barbaric invasion of Ukraine,” said Sen. Warner.
“Putin and his cronies can move, store, and hide their wealth using cryptocurrencies, potentially allowing them to evade the historic economic sanctions the U.S. and its partners across the world have levied in response to Russia’s war against Ukraine. I’m glad to introduce the Digital Asset Sanctions Compliance Enhancement Act with my colleagues to strengthen our sanctions program and close off any avenues for Russian evasion,” said Sen. Warren.
“The U.S. and its allies have imposed some of the strongest sanctions in history to try to stop Putin and his cronies from waging war on Ukraine. A sanctions system without strong authorities to limit evasion using digital assets is like having a security system but leaving the front door open. This bill would clarify Treasury’s authorities and strengthen our sanctions on Putin and his enablers,” said Sen. Reed.
“Vladimir Putin’s unprovoked war in Ukraine is a threat to democracies everywhere, and if we are going to hold him and his cronies accountable, we have to be sure they aren’t using digital tools to evade sanctions,” said Sen. Tester. “I’m proud to introduce this legislation that will make sure we isolate Putin and sends a message to America’s adversaries that folks who threaten freedom and democracy around the world cannot hide from the consequences of their actions.”
“We’ve imposed devastating sanctions on Russia, and we must ensure that there aren’t any loopholes that would allow Putin and his oligarchs to evade them,” said Sen. Cortez Masto. “This legislation gives the U.S. the tools it needs to crack down on any entity using cryptocurrency to trade with sanctioned banks or individuals. We must do all we can to completely isolate Putin, and that includes strengthening the enforcement mechanisms in all of our economic measures.”
“Digital currencies can offer the Russian government and wealthy oligarchs an opportunity to evade the sanctions that President Biden has enacted on Russia as Putin continues to wage his unprovoked and inexcusable war of choice against Ukraine,” said Sen. Duckworth. “The United States can do more to ensure Putin and his cronies feel the full weight of the free world’s sanctions, which is one reason I’m proud to help introduce this legislation with Senator Warren to crack down on cryptocurrency exchanges that engage with Russian entities.”
“Russia must be held accountable for its cold-blooded, unprovoked attack on Ukraine. We’ve seen how economic sanctions can deliverer a major blow to the Russian economy, but we must do everything in our power to prevent Putin and his corrupt cronies from circumventing these sanctions using cryptocurrencies. This legislation provides the necessary tools to monitor and shut down any such loopholes,” said Sen. Van Hollen.
The Digital Asset Sanctions Compliance Enhancement Act would combat the risk of Russian actors from using digital assets to evade international sanctions by discouraging foreign crypto firms from doing business with sanctioned Russian elites, providing the Administration with authority to suspend transactions with Russia-linked crypto addresses, and increasing transparency around crypto holdings.
Specifically, the Digital Asset Sanctions Compliance Enhancement Act would close potential avenues for evasion of sanctions against Russia by:
Earlier this month, Sens. Warren, Senate Intelligence Committee Chairman Mark Warner, Senate Banking, Housing, and Urban Affairs Chairman Sherrod Brown, and Senate Armed Services Committee Chairman Jack Reed led a letter to Treasury Secretary Janet Yellen raising concerns regarding the potential use of cryptocurrency to evade sanctions, which have become even more urgent amid the sanctions imposed on Russia after their invasion of Ukraine.
Image by Gayatri Malhotra on Unsplash
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