U.S. Senator Elizabeth Warren and 10 other lawmakers have introduced the “Digital Asset Sanctions Compliance Enhancement Act of 2022.” The bill “would place sweeping restrictions on persons who build, operate, and use cryptocurrency networks even if they have no knowledge or intent to help evade sanctions,” an expert said.
Lawmakers Unveil Digital Asset Sanctions Compliance Enhancement Act
U.S. Senator Elizabeth Warren introduced a bill titled “Digital Asset Sanctions Compliance Enhancement Act of 2022” during a Senate Banking Committee hearing Thursday. Ten other Democratic senators are co-sponsoring the bill, including Jack Reed and Mark Warner.
The aim of the bill is “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 explained in a joint press release.
Noting that the bill will “strengthen our sanctions program and close off any avenues for Russian evasion,” Senator Warren claims:
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.
However, many people have pointed out that cryptocurrency will not help Russia evade sanctions, including FBI Director Christopher Wray, who said last week that the Russians’ ability to circumvent sanctions with cryptocurrency is “highly overestimated.” Carol House, the director of cybersecurity for the National Security Council, recently said that crypto is an ineffective tool to circumvent sanctions.
By enacting the Digital Asset Sanctions Compliance Enhancement Act, the president could sanction foreign cryptocurrency firms that do business with sanctioned Russian companies. This would prohibit them from transacting with U.S. citizens and block their assets. The Treasury secretary would have the authority to ban crypto platform operators and facilitators from conducting business with Russian users. It will require the Treasury to report foreign cryptocurrency trading platforms that pose a high risk of money laundering and sanctions evasion. U.S. taxpayers would be required to report all offshore crypto transactions over $10K under the new bill.
Jerry Brito, executive director of D.C.-based think tank Coin Center, explained that the bill “would place sweeping restrictions on the cryptocurrency ecosystem under the guise of bolstering sanctions against Russia for its unjustified invasion of Ukraine.” He detailed:
This bill will impose severe restrictions on individuals who create, operate and use cryptocurrency networks, even though they do not know or intend to evade sanctions.
According to the text of the bill, the term “digital asset transaction facilitator” is defined as “any person, or group of persons, that significantly and materially facilitates the purchase, sale, lending, borrowing, exchange, custody, holding, validation, or creation of digital assets on the account of others, including any communication protocol, decentralized finance technology, smart contract, or other software, including open-source computer code.”
Noting that “miners, node operators, smart contract developers, etc.” would be subject to sanctions under Senator Warren’s new bill, Brito stressed:
[The bill]Calls for sanctions for technologists and their users are only for publishing open-source software, or for facilitating network communication. This is excessive, unconstitutional and unnecessary.
Let us know your thoughts on the Digital Asset Sanctions Compliance Enhancement Act. Please leave your comments below.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThe information contained in this article is intended to be informative. It does not constitute an offer, solicitation, or recommendation of products or services. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. The author and the company are not responsible for any loss or damage caused or alleged caused by the content or use of any goods, services, or information mentioned in the article.