US Treasury to closely monitor crypto sector to prevent Russia from bypassing sanctions

• A group of Senate Democrats has outlined concerns regarding the potential use of digital assets by Russia to avoid sanctions.
• Yellen stated that the US will continue to monitor the cryptocurrency sector.
• The Treasury believes that crypto is not the only sector where things can be evaded.

The United States Treasury Secretary Janet Yellen stated the US will monitor the potential use of cryptocurrencies by Russia to avoid sanctions. This comes after several Senate Democrats raised concerns about the use of the new asset class for evading sanctions. 

Senate Democrats seek clarity on crypto amid sanctions

A group of Senate Democrats has sent a letter to the Treasury to seek more information on what the Treasury Department is doing to ensure that cryptocurrencies are not being utilized for the purpose of bypassing sanctions against Russia.

Lawmakers, including Elizabeth Warren and Senate Banking Committee Chairman Sherrod Brown, raised concerns that some cryptocurrency firms may not be complying with the new rules. They further asked for more detailed information on how regulators will monitor and enforce restrictions that the US has imposed on Russia following the latter’s invasion of Ukraine.

The group of Democrats further highlighted that cryptocurrency trading has skyrocketed since the sanctions were announced. Bitcoin price has risen significantly, over 16% in the past two days. 

The senators requested more information about the easy Treasury’s Office of Foreign Assets Control is working with government officials to check whether there are additional tools needed and for ensuring compliance.

Yellen stated that while cryptocurrency is often mentioned, it does not seem to be the only channel where sanctions can be evaded. 

Although many major cryptocurrency exchanges including Binance, Coinbase and Kraken have refused a request from the Ukraine Minister of Digital Transformation, Mykhailo Fedorov to block Russian addresses, they are complying with applicable sanctions against Russia.

Leading crypto exchange Binance stated that it is taking the necessary steps to ensure that the firm takes action against those that have had sanctions levied against them. The exchange further stated that it will be happy to apply additional actions if sanctions are further widened.

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