Industry experts and lawmakers who spoke at a hearing before the U.S. Senate Committee on Banking, Housing and Urban Affairs disagreed on how the state should handle digital assets used for illegal purposes.
Michael Chobanyan, founder of the cryptocurrency exchange Kona and head of the Blockchain Association of Ukraine, urged the Binance platform to speak externally during Thursday’s hearing on “Understanding the role of digital assets in illegal finance.” He stated that the cryptocurrency exchange “is still working on the ruble” and indicated that the company does not comply with existing sanctions against Russia, which has carried out a military invasion of Ukraine since February 24.
Choubanyan said in a statement that KUNA had stopped “all support for the Russian ruble” in an attempt to support Ukraine and weaken the country’s economy, which is currently launching ground and air strikes. Binance chief Changpeng Zhao said earlier that the stock exchange complied with all sanctions rules, but the spokesman added that the company would not “unilaterally freeze millions of innocent user accounts” in Russia at the time.
“To stop Russia and create a more democratic world of personal freedom through cryptocurrency, we urge cryptocurrency exchanges around the world, including Binance, to prevent any interaction with those under sanctions until the fall of the Putin regime and the end of an attack. in Ukraine, he said.
Wife founder Michael Chobanyan addresses the Senate Banking Committee externally
Some of the MPs present during the hearing disputed the idea that cryptocurrencies owned by wealthy Russians or Russian President Vladimir Putin could be used to circumvent existing sanctions. Senator Pat Tomey stated that “there is no evidence that Russia uses cryptocurrencies to avoid sanctions in any physical way,” adding that their traceability makes digital assets too risky for criminals to use for illegal transactions.
Discussions about Russia and Ukraine in the hearings represented potential contradictions in the use of encryption. On the one hand, some legislators have suggested that a country like Russia could use technology to circumvent sanctions, as has been the case with Venezuela, Iran and North Korea. On the other hand, cryptocurrency transactions have allowed good select people to quickly send money to Ukrainians who need food and military equipment for defense – Chobanyan said it only took “about ten minutes” to arrange cryptocurrencies to Ukraine, while it took the National Bank of Ukraine about ten days. To regulate money transfers.
Ransomware attacks have also been on the lips of lawmakers, given the remarkable tendency of criminals to demand payments in cryptocurrencies, including Bitcoin (BTC), to prevent the release of sensitive information or restore access to critical systems. However, according to Jonathan Levine, co-founder and head of strategy at analytics firm Chainalysis, wallet addresses associated with illegal activity represented “only 0.15% of digital asset transaction volumes in 2021,” also an all-time high. US authorities were also able to track down and confiscate several funds as a result of the ransomware attack on the Colonial pipeline in May 2021.
“The over-reference of cybercrime in cryptocurrencies ignores important causes and preventative measures that can be taken,” said Michael Moser, former acting director of the Financial Crimes Enforcement Network.
Legislators and industry leaders have previously criticized government officials for not providing sufficient regulatory clarity in the crypto area. Republican Sen. Synths Loomis said in December that she plans to introduce legislation that provides a comprehensive framework for cryptocurrencies, including clarifying stable coins and guiding regulators to determine which coins to categorize into different asset classes.
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The Wyoming senator has not mentioned her bill during her hearing and has not mentioned it on social media accounts since March 9, shortly after US President Joe Biden signed an executive order that would establish a regulatory framework for cryptocurrencies. However, Democratic Sen. Elizabeth Warren said Thursday that she introduced a bill announced earlier this month aimed at cracking down on cryptocurrencies as a way to avoid financial sanctions.
“The best thing Congress can do is make it clear,” Mr. Monsieur said. “There are many crypto companies you want to join.