by Kevin Helms
A U.S. lawmaker has urged the Biden administration to develop a “robust strategy” to prevent cryptocurrency from being used to evade sanctions. “Emerging technologies like cryptocurrency offer many positive applications like humanitarian relief, but the administration has not kept pace in ensuring this novel form of currency is not used to the detriment of U.S. national security,” he said.
A senior member of the House Foreign Affairs Committee, U.S. Representative Michael McCaul (R-TX), has made a number of efforts to prevent cryptocurrency’s use to evade U.S. sanctions. He issued a statement Thursday urging the Biden Administration to create a “robust strategy” to stop crypto from being used to circumvent sanctions.
“Emerging technologies like cryptocurrency offer many positive applications like humanitarian relief, but the administration has not kept pace in ensuring this novel form of currency is not used to the detriment of U.S. national security,” the congressman noted, elaborating:
Punishing criminals is a good first step, but I urge the administration to develop a robust strategy to stop bad actors from using cryptocurrency to evade U.S. sanctions.
His statement followed the sentencing of Virgil Griffith to more than five years in federal prison for helping North Korea evade U.S. sanctions using cryptocurrency technologies.
Rep. McCaul also sent a letter to President Joe Biden last month raising concerns about “the potential abuse of emerging technologies like cryptocurrency by Russia to evade sanctions.” He cited “an expected UN report on North Korea using stolen cryptocurrencies to fund its nuclear program.” He received no response from Biden.
The lawmaker then sent a similar letter to Director of National Intelligence Avril Haines after her testimony before the House Permanent Select Committee on Intelligence regarding how her department will deal with cryptocurrency-related sanctions evasion.
Earlier this month, McCaul joined House Foreign Affairs Committee Chairman Gregory Meeks (D-NY) to introduce the Russia Cryptocurrency Transparency Act. The bill gained bipartisan support and subsequently passed out of the House Foreign Affairs Committee. This legislation will help “ensure the U.S. is taking the necessary steps to prevent these emerging technologies from being used to evade U.S. sanctions.”
While some lawmakers are worried about the use of crypto to circumvent sanctions, many experts have said that crypto is not an effective tool for sanctions evasion. A U.S. Treasury official said in March: “We don’t see that crypto could be used in a large-scale way to evade sanctions.” Nonetheless, Senator Elizabeth Warren (D-MA) introduced a crypto sanctions bill that “would place sweeping restrictions on persons who build, operate, and use cryptocurrency networks even if they have no knowledge or intent to help evade sanctions.”
What do you think about Rep. McCaul wanting a robust strategy to prevent crypto from being used to evade sanctions? Let us know in the comments section below.
A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.
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by Kevin Helms