US Senators Introduce Crypto Sanctions Bill — Expert Says It’s Overbroad and Unconstitutional

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US Senators Introduce Crypto Sanctions Bill – During a Senate Banking Committee hearing on Thursday, Senator Elizabeth Warren introduced the “Digital Asset Sanctions Compliance Enhancement Act of 2022.” Ten other Democratic senators, including Jack Reed,  Mark Warner, and Jon Tester have signed on to the bill.

In a joint press release, the senators emphasized that the bill’s goal is to “guarantee that Vladimir Putin and Russian elites do not exploit digital assets to disrupt the international community’s economic sanctions against Russia following its invasion of Ukraine.”

The bill will “strengthen the sanctions campaign” and “shut off any routes for Russian evasion.”

Also Read: Indian Government Says Central Bank Has No Plan to Issue Cryptocurrency

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Senator Warren claims:

“Putin and his cronies may move, hide, and keep their wealth using cryptocurrencies, perhaps allowing them to dodge the historic economic sanctions placed by the US and its allies throughout the world in reaction to Russia’s war in Ukraine.”

Many people, including FBI Director Christopher Wray, have pointed out that cryptocurrency will not help Russia evade sanctions. Wray said last week that the Russians’ ability to circumvent sanctions with cryptocurrency is “highly overestimated.”

Crypto, according to Carol House, the National Security Council’s director of cybersecurity, is an inadequate method for circumventing sanctions.

The president might sanction international crypto businesses conducting business with sanctioned Russian entities under the Digital Asset Sanctions Compliance Enhancement Act, prohibiting their interactions with US people and freezing their assets. 

It would also grant the Treasury Secretary broad authority to restrict crypto platforms and transaction facilitators based in the United States from transacting with Russian crypto users. Foreign crypto trading platforms that are regarded as high risk for sanctions evasion and money laundering will be identified by the Treasury. 

Taxpayers in the United States would also be required to record any offshore cryptocurrency transactions worth more than $10,000 under the plan.

The bill “would establish significant restrictions on the cryptocurrency ecosystem under the pretense of boosting sanctions against Russia for its unjustifiable invasion of Ukraine,” according to Jerry Brito, executive director of the D.C.-based think tank Coin Center. 

Also Read: Argentinians Criticize IMF Requirement to Slow Down Crypto Adoption in the Country

He went on to say:

“Anyone who establishes, uses, or operates cryptocurrency networks, even if they have no knowledge or purpose of assisting in the evasion of sanctions, would be subject to extensive prohibitions under the law.”

Senator Warren’s new bill would expose “miners, node operators, smart contract creators, and others” to fines, according to the statement. 

Brito emphasized:

“The bill proposes that technologists and users be sanctioned for simply publishing open source software or enabling network participant conversation. This is unnecessarily broad, and unconstitutional.”

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