US Senator Elizabeth Warren is preparing a bill to end the use of cryptocurrencies as a way to avoid financial sanctions.

Warren’s latest move to crack down on crypto comes with the US government’s pressure to exclude Russia’s use of crypto to avoid the amount of economic sanctions imposed on the country.

According to an NBC News report on Tuesday, one of the provisions in Warren’s new cryptocurrency bill – still in draft form – would require local crypto exchanges to provide “detailed records” to the Treasury of customer identities and transfers to private cryptocurrencies. .

It also aims to “force companies to choose between doing business in the United States or with sanctioned individuals and entities by threatening secondary sanctions on foreign exchange transactions.”

The Treasury Department’s Financial Crime Enforcement Network (FinCEN) is also developing similar claims based on the Warren bill, according to NBC.

Ukraine’s Deputy Minister for Digital Transformation Alex Bornyakov asked cryptocurrency exchanges to block Russian users in the last week or so. However, major crypto exchanges such as Binance, Coinbase and Kraken have said they will not implement a total ban, but are obliged to comply with US sanctions.

Senator Warren was very skeptical of this sector for a while. It was not until 2021 that she called DeFi the “most dangerous” part of encryption, introduced a bill addressing the role of cryptocurrencies in ransomware, and during a hearing criticized the Ethereum network for high fees. Therefore, it is not surprising for industrial observers that they seized the opportunity to push for tougher legislation.

Warren, who was among a group of senators who briefed Finance Minister Janet Yellen on the matter last week, tweeted earlier today that her bill “ensures that Putin and his cronies will not use cryptocurrencies to undermine our economic sanctions.”

While the idea that Russia uses cryptocurrencies to avoid sanctions made headlines, experts such as Jake Chervinsky, policy chief at the Blockchain Association’s Cryptocurrency Policy Promoter, argued that the country “can not and will not use cryptocurrencies to avoid sanctions.” .

Chervinsky noted that the size of the monetary needs of the Russian state exceeds the potential of the cryptocurrency markets, sanctions that prevent US companies and citizens from doing business with Russia regardless of the payment used, and the lack of Russian crypto infrastructure to support demand. However, his arguments did not address the issue of Russian individuals using cryptocurrencies to avoid sanctions.

Warren’s regulatory push comes just a week after Federal Reserve Chairman Jerome Powell and a House panel asked Congress to launch cryptocurrencies against Russia.

Powell said the situation with Russia underscores the need for a strong regulatory framework in the sector “to prevent these fiat cryptocurrencies from being used as a means of financing terrorism, general criminal behavior, tax evasion and the like.”

Related: Bitcoin expects losses after US bans Russian oil, gold reaches all-time highs

Earlier this week, FinCEN sent a warning to “all financial institutions to be vigilant” about Russia’s attempts to evade US sanctions, and set a number of red flags to identify possible sanctions evasions.

The funds involved included the use of corporate tools to hide ownership of assets and sources of funds, shell companies to carry out international bank transfers, and the use of third parties to protect identity and newly created accounts to send or receive money from penalties. institute. The FinCEN warning read:

“It is very important that all financial institutions, including those with a clear understanding of risky capital flows such as stock exchanges and CVC […] suspicious activity related to potential evasion of sanctions and timely reporting, and conduct due diligence clients based on risk, or , where appropriate, improved due diligence. “

Source: CoinTelegraph