Sen. Elizabeth Warren Rolls Out Bill Designed To Close Crypto Loopholes to Sanctions

The bill was co-sponsored by 10 other senators who say they’re concerned about the role digital assets play in money laundering

article-image

Massachusetts Senator Elizabeth Warren | Source: Shutterstock

share

key takeaways

  • The bill was introduced during Thursday’s Senate Banking Committee hearing on digital assets and crime
  • Russia’s invasion of Ukraine has highlighted the need for greater oversight, Warren said

Sen. Elizabeth Warren, D-Mass., revealed a new bill Thursday aiming to prevent crypto companies from doing business with sanctioned entities. 

The Digital Assets Sanctions Compliance Enhancement Act, introduced during a Senate hearing on the role of digital assets in illicit finance, would give President Biden the go-ahead to slap secondary sanctions on those that transact with sanctioned individuals, companies or governments. It would apply to any sanctions imposed by the US — most pressingly, Russian ones. 

“Crypto provides a new payment option for criminals and cheats, and it’s how those who attack our systems with ransomware collect their money with the least risk that they will be caught,” Warren said during the hearing. “In fact, according to one of our witnesses who’s here with us today about three-quarters of the money collected in ransomware attacks last year went to Russia-linked actors.”

Iran, North Korea and Venezuela all have turned to crypto in an effort to evade sanctions, Jonathan Levin, co-founder of blockchain tracker Chainalysis, said during the hearing.

The bill is co-sponsored by 10 other senators, including Sen. Mark Warner, D-Va. Warner was part of the bipartisan group that worked to include cryptocurrency tax provisions in the infrastructure bill last September.

Witnesses — Levin, Michael Mosier, former acting director and current deputy director and digital innovation officer of the Financial Crimes Enforcement Network (FinCEN) and Michael Chobanian, founder of KUNA Exchange and president of the Blockchain Association of Ukraine — said it would be difficult for Russians to circumvent all sanctions with crypto.

“I’m the person who is behind all the numbers, I know how this happens, and it’s impossible, physically impossible, to transfer large amounts of money from fiat into crypto,” Chobanian said. 

The levels of requisite liquidity to run serious amounts of Russian government capital via digital assets is a pipe dream, according to Mosier.

“The crypto industry claims that Russians can’t use crypto to hide their wealth ​​because the $3 trillion crypto market is too small and too transparent for that to work,” Warren said, adding that blockchain-hopping and shuffling funds between tokens could be a workaround.

“You can always split the money up into wallets…but that doesn’t remove the record of where the money actually sits,” Levin said. 

Nonetheless, the crisis in Ukraine has underscored the need for more transparency in the blockchain space, according to Warren.

“That’s why I’m introducing today my Digital Asset Sanctions Compliance Enhancement Act,” she said. “This is a bill that would authorize the president to sanction foreign cryptocurrency firms that are doing business with sanctioned Russian entities.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Monad Report Graphic.png

Research

Monad represents an ambitious attempt to address the scalability challenges faced by existing EVM chains. By leveraging innovative consensus and execution mechanisms, including pipelined consensus-execution and optimistic parallel execution, Monad aims to achieve performance metrics of 10,000 TPS and 1-second finality while maintaining full EVM compatibility. This approach positions Monad as a potential evolution of the Ethereum ecosystem, offering enhanced scalability without sacrificing the familiar developer or user experience.

article-image

Bitwise took the initial steps for an XRP ETF Wednesday

article-image

Plus, enrollment for the Donald Trump-backed crypto project is underway

article-image

On Solana so far, there are two main competitors: Jito and Solayer

article-image

Plus, Sui-eet liquidity surge and USDC’s new home on Base

article-image

The Web3 community is stacking bricks when it should be building bridges