- Congress Moves Ahead With Russia’s Cryptocurrency Transparency Law
- Lawmakers want to know when, why, and how the State Department uses cryptocurrency to reward whistleblowers
As the war in Ukraine rages on, Congress is keen to learn what role cryptocurrencies have played in the conflict in the past seven months.
Russia’s Crypto Transparency Law passed the lower house on Tuesday and moved to the Senate, where it is currently on the committee. The bill covers many topics that have received attention since the Russian invasion of Ukraine.
“The imperative to starve Vladimir Putin of funds intended for Russia’s illegal war in Ukraine has led to a renewed focus on the role cryptocurrencies can play in money laundering and sanctions evasion,” said bill sponsor Rep. After passing the legislation in the House of Representatives.
The bill would require the State Department to submit a report to Congress detailing how “cryptocurrencies or other technologies that incorporate blockchain” are used to promote economic development and provide humanitarian aid to Ukraine, according to the current draft. It will also ask the Treasury and State Department to prepare a report on how cryptocurrencies affect the effectiveness and enforcement of sanctions against Russia.
The bill also requires the Secretary of State to notify certain congressional committees at least 15 days in advance of making a crypto payment under the Rewards for Justice Program, a counterterrorism program that rewards individuals for information related to illicit activity.
Ministry of Foreign Affairs He said in 2021 Some of the rewards may be paid in cryptocurrencies, but with this new law, Congress will want an explanation as to why digital assets are used instead of fiat currencies and traditional payment methods.
New diplomatic point person on crypto assets
Under the bill, the State Department will be required to appoint a new role: cryptocurrency security manager.
“While there are legitimate and valuable use cases for cryptocurrencies, some digital asset products can be used to mask transaction assets and facilitate sanctions evasion,” Meeks said.
The idea of whether cryptocurrencies could be used to evade sanctions has been an ongoing debate since the start of the war. While lawmakers, particularly from the political left, have argued that digital currencies play an important role in illicit financial activities, proponents of digital assets reject that the transparent nature of crypto makes this widely nearly impossible.
“I will quote Khleifi as an advisor to the Deputy Treasury Secretary, who recently said, “You can’t flip the switch overnight and run the G20 economy on cryptocurrency, there is no liquidity,” said Michael Moser, the former acting director and current deputy director and chief digital innovation officer at Financial Crimes Enforcement Network (FinCEN), during a congressional hearing in March.
Also on Tuesday, with the passage of the Russian Cryptocurrency Transparency Act in the House of Representatives, the Senate heard from Elizabeth Rosenberg, Assistant Secretary of State for Terrorism Financing and Financial Crimes, and Andrew Adams, Director of the KleptoCapture Task Force at the Department of Justice. The hearing, which was held by the Commission on Banking, Housing and Urban Affairs, touched on how cryptocurrency mixing services were used to evade sanctions.
“When [sanctions] It can act as a deterrent to any criminal seeking to use a mixer in order to launder their money — money proceeds from corruption or other criminal activity — and this is an effective way we can use to signal that we cannot tolerate “money laundering,” Rosenberg said. “Whether it’s a Russian criminal actor, or an Iranian, or a North Korean, or wherever they might come from.”
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