Senators Ask Treasury to Probe if Russia Can Use Crypto to Get Around Sanctions

Yellen Asks Congress to Make Banks Report to IRS

Four Democratic U.S. senators Wednesday requested Treasury Secretary Janet L. Yellen explain how her department plans to get cryptocurrency companies to enforce economic sanctions on Russia, The New York Times reported.

The Democrats were Elizabeth Warren of Massachusetts, Mark Warner of Virginia, Sherrod Brown of Ohio and Jack Reed of Rhode Island.

The letter to Yellen also asked whether decentralized financial structures were hindering sanctions enforcement.

The senators are concerned that Russia could turn to digital assets such as crypto or its own digital ruble to help ease the pressure of the economic sanctions, which include the freezing of the Russian central bank’s foreign assets, cutting off Russian banks from the SWIFT payment system, and private companies cutting off trade and investment in Russia.

A 2021 Treasury report about the burgeoning digital asset market suggested a possible problem for governments hoping to change countries’ behavior by implementing sanctions.

The Times has also recently said there were numerous crypto tools available to Russian entities who want to keep making deals without going through regular banks.

“These reports are even more troubling because of analyses that suggest that the cryptocurrency industry may not be fulfilling its responsibility to comply with U.S. sanctions,” the senators wrote.

Read more: Blockchain Gaming Firm Animoca Blocks Russian Users

Animoca Brands, a blockchain gaming giant, will be blocking Russia from its platform because of the invasion of Ukraine, according to PYMNTS.

The sanctions against Russia have come from all directions — though many major crypto firms are still working in the country.

Animoca’s move will have an impact on subsidiaries Gamee, Lympo and others. But it likely won’t affect the company negatively, as the Russian user base isn’t all that large, according to co-founder Yat Siu.