US Treasury to Hold Crypto Exchanges Accountable for Sanction Evasion

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In Brief
  • Deputy Treasury Secretary issues warning to crypto exchanges.

  • Most major exchanges have already agreed to comply.

  • Ukraine has benefitted more from crypto than Russia.

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There has been some saber-rattling by the Deputy U.S. Treasury Secretary this week as cryptocurrencies remain in the spotlight as a primary concern for Russian sanction evasion.

On March 29, Deputy U.S. Treasury Secretary Wally Adeyemo said that any actor helping Russia bypass sanctions will be held accountable.

Adeyemo specifically mentioned crypto exchanges when speaking to CNBC this week. He stated that the U.S. has not seen any meaningful sanction evasion yet, but is aware that Russia will try and use “any means possible,” to do so.

Adeyemo said that opaque shell companies and crypto assets were likely to be used, declaring:

“What we want to make very clear to crypto exchanges, to financial institutions, to individuals, to anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable,”

Most crypto exchanges already in compliance

It has been widely researched, reported, and accepted that a country the size of Russia is very unlikely to use cryptocurrencies to avoid sanctions. Yet many U.S. politicians still claim that they are the axis of evil in financial terms.

Adeyemo warned that “we will come and we will find you,” though it is unclear how Uncle Sam plans to hold crypto exchanges that it has no jurisdiction over accountable.

Many of the world’s major exchanges such as Binance, Coinbase, and Gemini, have already agreed to abide by U.S. imposed sanctions and restrict or report suspicious activity that may be linked to Russian oligarchs or organizations. This doesn’t appear to have satiated the anti-crypto brigade, however.

Vehemently anti-crypto Senator Elizabeth Warren is one that wants to take the extreme step of wiping the digital asset industry out completely. Earlier this month, she proposed a new bill that would grant the Treasury overreaching powers over any entities involved with crypto. If enacted, U.S. authorities could arbitrarily ban software developers, miners, and node operators if they are suspected of interacting with any associated Russian crypto address.

Fortunately, the crypto industry and its users have rallied in support of Ukraine as digital asset donations to the country topped $100 million.

This would not have been possible without the technology due to the inefficient and antiquated banking system. Ukrainian ministers are working fast to legalize and legitimize crypto within the country to help its citizens and defending forces access finances.

Uncle Sam, meanwhile, still appears to be hell-bent on throwing the baby out with the bathwater.

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Martin has been covering the latest developments on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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