US Senate Banking Committee member Elizabeth Warren has introduced a bill allowing the Treasury Department to block transactions from cryptocurrency exchanges with addresses of individuals on the sanctions list.
The document is intended to prevent “Vladimir Putin and the Russian elites” from using digital assets to circumvent the restrictions imposed by the world community.
According to a press release, the bill proposes that:
the US President will receive additional powers regarding the introduction of secondary sanctions against foreign trading platforms that work with persons from the sanctions lists;
The Ministry of Finance will have the right to block transactions of crypto exchanges with Russian addresses;
FinCEN will oblige US taxpayers involved in offshore transactions with digital assets worth more than $10,000 to submit reports on these transactions to the regulator (tax form FBAR);
The Ministry of Finance will release a public report identifying foreign trading platforms that are highly likely to be used for sanctions evasion, money laundering or other illegal activities.
The document also expands the definition of “digital asset deal makers” to include “any individual who substantially and materially facilitates the purchase, sale, loan, borrowing, exchange, storage, possession, validation, or creation of digital assets by others, including any communications protocols, DeFi technologies, smart contracts or other software, including open source computer code.”
Warren’s proposal was criticized by industry advocacy organization Coin Center. In particular, the experts noted that almost all people who manage, use and design the blockchain fall under the latter definition, even if “they do not have the knowledge or intentions to help [Russia] evade sanctions.”
The Coin Center said the bill’s provisions are difficult to apply to regulated custodial services like exchanges and “nearly impossible” to apply to node operators, miners and software developers.
The organization also emphasized that the adoption of the bill in its current form will only increase the ability of the Russian government to control citizens who disagree with its line.