U.S. Senator Elizabeth Warren and 10 other lawmakers have introduced the “Digital Asset Sanctions Compliance Improvement Act of 2022.” One expert said that the bill “would place blanket restrictions on people who build, operate, and use cryptocurrency networks even if they have no knowledge or intent to help evade penalties.”
Lawmakers Unveil Act to Enhance Compliance with Digital Asset Sanctions
US Senator Elizabeth Warren presented a law Project titled “Digital Asset Sanctions Compliance Enhancement Act of 2022” during a Senate Banking Committee hearing on Thursday. The bill is co-sponsored by 10 other Democratic senators, including Mark Warner, Jack Reed and John Tester.
In a joint press release, the senators explained that the bill’s goal is “to ensure that Vladimir Putin and Russian elites do not use digital assets to undermine the economic sanctions imposed by the international community on Russia after its invasion of Ukraine.”
Noting that the bill would “strengthen our sanctions program and shut down any avenues of Russian evasion,” Senator Warren claims:
Putin and his associates can move, store, and hide their wealth using cryptocurrencies, which could allow them to evade the historic economic sanctions that the United States and its partners have imposed around the world in response to Russia’s war against Ukraine.
However, several people have suggested that cryptocurrency will not help Russia evade sanctions, including FBI Director Christopher Wray, who said last week that Russians’ ability to circumvent sanctions using cryptocurrency was “too exaggerated.” Carol House, Director of Cyber Security at the National Security Council, recently said that cryptocurrency is a inactive Sanctions circumvention tool.
The Digital Assets Sanctions Compliance Enhancement Act will enable the president to penalize foreign crypto companies that do business with sanctioned Russian entities, block their transactions with U.S. persons and block their assets. It also gives the Secretary of the Treasury explicit authority to prevent crypto platforms and transaction facilitators operating in the United States from doing business with any Russian crypto users. The Treasury Department will be required to identify foreign cryptocurrency exchanges that are deemed to be high risk for sanctions evasion and money laundering. The bill would also require US taxpayers to report any offshore crypto transactions over $10,000.
Jerry Prieto, executive director of the DC-based think tank Coin Center, explained that the bill “will place blanket restrictions on the cryptocurrency ecosystem under the guise of toughening sanctions against Russia for its unjustified invasion of Ukraine.” It is detailed:
The bill would place blanket restrictions on people who build, operate and use cryptocurrency networks even if they have no knowledge or intent to help evade penalties.
According to the text of the bill, the term “digital asset transaction facilitator” is defined as “any person or group of persons who tangibly and materially facilitates the purchase, sale, lending, borrowing, exchange, custody, holding, validation, or creation of digital assets for an account Others, including any communication protocol, decentralized finance technology, smart contract, or other software, including open source computer code.”
Noting that “miners, contract operators, smart contract developers, etc.” Brito stressed that he would be subject to sanctions under Senator Warren’s new law:
[The bill] Calls for penalizing technicians and users for simply publishing open source software or facilitating communication between network participants. This is unnecessary, loose, and unconstitutional.
What do you think of the Digital Asset Sanctions Compliance Enhancement Act? Let us know in the comments section below.
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