As the war between Russia and Ukraine goes to yet another level, the US Congress is keen to know the exact role of cryptocurrencies in the conflict. On Tuesday, the Russia Cryptocurrency Transparency Act was moved to the Senate where it is being looked at.
The State Department will submit a report to Congress detailing how cryptocurrencies or other technologies incorporating blockchain have been used to promote economic development and provide humanitarian aid to Ukraine. The Treasury and the State Department will also compile a report on how cryptos impact the effectiveness and enforcement of sanctions against Russia.
Moreover, the Secretary of State will notify certain Congressional committees at least 15 days before making a payment in crypto under its “Rewards for Justice Program” – a counterterrorism program that rewards individuals for information about illicit activity. In 2021, the State Department said some rewards may be paid in cryptocurrencies. With the new bill, Congress will want an explanation of why digital assets are being used as opposed to fiat currencies and traditional payment methods.
Rep. Gregory Meeks, D-NY, in a statement said the imperative of starving Vladimir Putin of funds for Russia’s illegal war in Ukraine has brought renewed focus on the role cryptocurrencies can plausibly have in money laundering and sanctions evasion. The hearing which was held by the Committee on Banking, Housing and Urban Affairs, also looked at how cryptocurrency mixing services may be used in sanction ducking.
Elizabeth Rosenberg, the assistant secretary for terrorist financing financial crimes, outlined that sanctions can serve as a deterrent to any criminal that would seek to use a mixer to launder their funds. This is an effective avenue that the government can use in order to signal that it cannot tolerate money laundering.