Source: United States Senator for Illinois Tammy Duckworth
March 17, 2022
[WASHINGTON, DC] – Today, U.S. Senator Tammy Duckworth (D-IL) joined U.S. Senators Elizabeth Warren (D-MA), Jack Reed (D-RI), Mark Warner (D-VA), Jon Tester (D-MT) and six of her colleagues in introducing the Digital Asset Sanctions Compliance Enhancement Act to ensure that Vladimir Putin and Russian elites can’t use digital assets to undermine the international community’s economic sanctions against Russia following its invasion of Ukraine. This legislation comes amid bipartisan concerns and warnings by federal agencies that Russian actors may try to evade economic sanctions by using digital currencies. Countries hit hard by sanctions, including North Korea and Iran, have been previously found to use cryptocurrency to curb the effects of economic sanctions.
“Digital currencies can offer the Russian government and wealthy oligarchs an opportunity to evade the sanctions that President Biden has enacted on Russia as Putin continues to wage his unprovoked and inexcusable war of choice against Ukraine,” said Duckworth. “The United States can do more to ensure Putin and his cronies feel the full weight of the free world’s sanctions, which is one reason I’m proud to help introduce this legislation with Senator Warren to crack down on cryptocurrency exchanges that engage with Russian entities.”
“Putin and his cronies can move, store, and hide their wealth using cryptocurrencies, potentially allowing them to evade the historic economic sanctions the U.S. and its partners across the world have levied in response to Russia’s war against Ukraine. I’m glad to introduce the Digital Asset Sanctions Compliance Enhancement Act with my colleagues to strengthen our sanctions program and close off any avenues for Russian evasion,” said Warren.
“The U.S. and its allies have imposed some of the strongest sanctions in history to try to stop Putin and his cronies from waging war on Ukraine. A sanctions system without strong authorities to limit evasion using digital assets is like having a security system but leaving the front door open. This bill would clarify Treasury’s authorities and strengthen our sanctions on Putin and his enablers,” said Reed.
“In order for the sanctions levied by the United States and our allies to have the maximum impact on Vladimir Putin and his oligarch friends, we must close off avenues they might use to evade those sanctions. This legislation will crack down on foreign actors who help sanctioned Russians use digital assets like cryptocurrencies to circumvent the crippling measures we’ve put in place to punish Russia for its barbaric invasion of Ukraine,” said Warner.
“Vladimir Putin’s unprovoked war in Ukraine is a threat to democracies everywhere, and if we are going to hold him and his cronies accountable, we have to be sure they aren’t using digital tools to evade sanctions,” said Tester. “I’m proud to introduce this legislation that will make sure we isolate Putin and sends a message to America’s adversaries that folks who threaten freedom and democracy around the world cannot hide from the consequences of their actions.”
The Digital Asset Sanctions Compliance Enhancement Act would curb the risk of Russian actors from using digital assets to evade international sanctions by discouraging foreign crypto firms from doing business with sanctioned Russian elites, providing the Administration with authority to suspend transactions with Russia-linked crypto addresses and increasing transparency around crypto holdings.
Specifically, the Digital Asset Sanctions Compliance Enhancement Act would close potential avenues for evasion of sanctions against Russia by:
- Requiring the President to identify foreign digital asset actors that are facilitating evasion of sanctions against Russia and authorizing the President to sanction such actors, prohibiting their transactions with U.S. persons and blocking their assets.
- Providing the Treasury Secretary clear authority to prohibit digital asset trading platforms and transaction facilitators under U.S. jurisdiction from transacting with cryptocurrency addresses that are known to be, or could reasonably be known to be, in Russia.
- Directing FinCEN to require U.S. taxpayers engaged in a transaction with a value greater than $10K of cryptocurrency offshore to file FinCEN Form 114 (FBAR).
- Requiring the Treasury Department to report on its progress in implementing these provisions, including any resources needed by the Department to improve implementation and progress in coordinating with foreign partners.
- Requiring the Treasury Department to issue a public report identifying foreign digital asset trading platforms that are determined to be high risk for sanctions evasion, money laundering or other illicit activities.
The copy of the bill text can be found here.
Along with Duckworth, Warren, Reed, Warner and Tester, this legislation is co-sponsored by U.S. Senators Debbie Stabenow (D-MI), Raphael Warnock (D-GA), Chris Van Hollen (D-MD), Tina Smith (D-MN), Catherine Cortez Masto (D-NV) and Bob Menendez (D-NJ).
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