US Lawmakers press Biden administration on use of crypto to evade sanctions

Written by Hannah Lang

(Reuters) – Two lawmakers are pressuring the Biden administration over the use of cryptocurrencies to circumvent sanctions on Russia, Iran and North Korea, with digital assets such as stablecoin Tether targeting sanctioned entities. We are asking stakeholders what additional privileges may be needed to prevent this from being used. Also in Russia and other places.

Why is it important?

Democratic Sen. Elizabeth Warren and Republican Sen. Roger Marshall sent a letter Sunday to officials, including Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin, detailing how cryptocurrencies can be used to avoid sanctions. This indicates that there is increasing scrutiny on whether it could be used for other purposes.

context

Mr. Warren and Mr. Marshall expressed particular concern about the use of Tether, whose value is pegged to the U.S. dollar and is designed to maintain a stable value.

The Wall Street Journal reported earlier this month that Russian intermediaries were using Tether to procure weapons components for drones and other military equipment to circumvent Western sanctions.

Reuters reported this month that Venezuela’s state oil company PDVSA plans to use Tether to export crude oil and fuel as the US plans to reimpose oil sanctions on the country.

important quotes

“The national security threat posed by virtual currencies requires a proportionate response from our nation’s defense community,” Warren and Marshall said. They noted that although Tether’s preferred crypto trading platform, Galantex, has been sanctioned, “it is not clear whether these measures have stopped the flow of funds through the platform.”

response

A Tether spokesperson said in a statement that any activity using cryptocurrencies can be tracked online, and that “any assets may be seized and any criminals may be arrested.”

“We are working with law enforcement to do just that. Tether honors the (Office of Foreign Assets Control and Specially Designated Nationals) list, including the FBI, Department of Justice, (U.S. “We work with more than 120 law enforcement agencies in 40 countries,” the spokesperson said.

(Reporting by Hannah Lang in New York; Editing by Bill Berkrot)

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