Democrats in the United States ask the Ministry of Finance what effects cryptoassts have on Russian sanctions

Democrats in the United States ask the Ministry of Finance what effects cryptoassts have on Russian sanctions

Four democratic senators in the United States have asked the Ministry of Finance to define its strategy for monitoring and enforcement of compliance with crypto sanctions after concerns that Russia could use digital assets to avoid its economic punishments.

in a Book The senators Elizabeth Warner, Sherrod Brown and Jack Reed On Wednesday to finance minister Janet Yellen, her concern expressed that "criminals" and "rogue states" use crypto as a "new means to hide cross -border transactions for shameful purposes."

The crisis in Ukraine has the efforts of the United States to act against what they perceive as criminal crypto activities.

"In view of the sanctions imposed against Russia after his invasion in Ukraine and reports that Russian companies are preparing to weaken some of the worst effects of the sanctions that were imposed against the country, the concerns have become even more urgent by using the series of" cryptocurrencies ". Related tools available. ”

The Ministry of Finance defines sanctions as Economic and Financial Instruments To address threats to national security, foreign policy and the economic health of the United States.

After President Vladimir Putin's march into Ukraine, Russia was imposed on a number of economic restrictions, as Western allies put pressure on an armistice and a troop deduction in line.

Although the sanctions are not yet fully implemented, they are already sending shock waves through the global financial ecosystem, with some assets being better than others.

In the expectation of the concerns of the Senator, Jake Chervinsky, Head of Policy at Blockchain Association, said an industrial group based in Washington, went to Twitter to argue that crypto cannot be used to mitigate sanctions.

In particular, he wrote: "US citizens around the world break down the connections to Russia [Specialy Designated National and Blocked Persons] now, regardless of which payment systems they used before."

"There is no reason to assume that the existence of crypto will convince one of them to deliberately violate sanctions laws and to risk fines and prison terms."

In the meantime, Krypto is said to have reacted positively to affected Russian oligarchs and companies who were looking for financial protection.

"The trade volume between the Russian ruble and Bitcoin has increased in the last days after the wave of sanction announcements to the highest level since May 2021," said the senators in their letter.

Democrats demand more of the crypto community

The letter also contains concrete examples of what the United States views as disregard for financial law by the crypto community.

Such a case is the refusal of the mining company Marathon Digital and his decision in May to process transactions of wallets that are listed at Specialy Designated National and Blocked Personal List of the Office of Foreign Assets Control (OFAC).

ofac is the Financial Intelligence and Enforcement Agency of the Ministry of Finance, which focuses on the imposition and enforcement of sanctions based on the US foreign policy and the national security goals.

Another example was the mention of decentralized financing (Defi) and its use of smart contracts that aim to replace brokers, banks and financial intermediaries, as a growing threat to financial stability and sanction controls.

"The cryptocurrency industry may not do justice to its responsibility to comply with the US sanctions," the letter says. " October-Guidance of the OFAC states that many "members of the virtual monetary industry OFAC sanctions guidelines and procedures for months or even years after the start of business.

Therefore, the four Democrats said that they want to obtain information about measures from the Ministry of Finance that the Ministry of Agreement's guidelines for enforcing sanctions by crypto participants.

The Ministry of Finance also asked questions, including how OFAC worked with foreign governments, in order to ensure that crypto does not avoid sanctions, challenges that the authority faces in the context of the October directive and how often self-made sanctions have occurred.

Two other questions were asked, which related to how the growth of Defi has contributed to the ability of the "defamed actors" to avoid sanctions, and to enforce them to the ability of the agency, as well as what other legal instruments and funds are necessary to avoid Russia's circumvention.

The senators ask for answering their questions and information by March 23 at the latest.

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The contribution Democrats in the USA ask the Ministry of Finance, what effects cryptoassts have on Russian sanctions, is not financial advice.