Sherman and Green Join Warren to Introduce Bill to Curb Use of Cryptocurrency for Russia Sanctions Evasion

Statement

Today, Congressman Brad Sherman (D-CA), who Chairs the Subcommittee on Investor Protection and Capital Markets, Congressman Al Green (D-TX), who Chairs the Financial Services Subcommittee on Oversight and Investigations, and thirteen House cosponsors introduced the Russian Digital Asset Sanctions Compliance Act of 2022. This bill serves as a House companion to legislation recently introduced in the Senate by Senators Elizabeth Warren (D-MA), Jack Reed (D-RI), Mark Warner (D-VA), and Jon Tester (D-MT). This legislation represents a significant step towards answering the Ukrainian government's repeated calls for cryptocurrency exchanges to stop providing services for Russia-based cryptocurrency wallets.

The sanctions which the U.S. and its allies have now imposed on the Russian banking and financial system, including the removal of seven major Russian banks from the SWIFT payments network, have significantly limited cross border payments in and out of Russia and the administration is considering doing more, and should. A number of major global payments providers, including Mastercard, Visa, PayPal, and American Express, have also recently announced that they will suspend all services in Russia, further isolating the country from the global economy. Several major crypto exchanges, however, have publicly resisted calls to suspend transactions with accounts and cryptocurrency wallet addresses based in Russia.

The bill would grant the Biden Administration explicit authority to prohibit crypto exchanges subject to U.S. law from facilitating transactions with Russia-based cryptocurrency addresses, as well as the authority to sanction foreign crypto exchanges found to be facilitating transactions for sanctioned Russian entities. The legislation also directs the Treasury Department's Financial Crimes Enforcement Network (FinCEN) to establish rules requiring all U.S. taxpayers engaged in cryptocurrency transactions of $10,000 or more with foreign accounts to report those transactions to FinCEN.

"In response to Russia's unprovoked war of aggression against Ukraine, we have seen hundreds of Western companies voluntarily join the effort to isolate the Russian economy. Most major financial institutions are doing more than the law requires to sanction Russia. However, repeated pleas from the besieged Ukrainian government for crypto exchanges to stop doing business in Russia have been met with libertarian platitudes and shrugs of indifference from wealthy corporate executives at these exchanges," said Congressman Sherman. "If President Biden chooses to answer Ukraine's calls for crypto exchanges to cease operations in Russia, this legislation will ensure he has the authorities needed to do that."

"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 Senator Warren.

"Russia's unprovoked declaration of war on Ukraine demanded a series of unprecedented sanctions on the Russian economy and Russian leadership led by the United States along with our international allies. I am proud to work with my colleagues on this bill to help prevent Russia from evading these economic sanctions by way of cryptocurrencies or other digital assets," said Congressman Green. "When all you can do is not enough, you must do all you can. And right now, doing all we can must include preventing top Russian persons and entities from leveraging their digital assets to avoid these tough sanctions."

The text of this legislation is available here.

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