The cryptocurrency sector has been discreetly pushing U.S. senators against legislation aimed to prohibit Russian billionaires from using digital currencies to circumvent sanctions imposed on Russian President Vladimir Putin’s cronies and their firms following Russia’s invasion on Ukraine.
Two legislations have been proposed in the U.S. House and Senate that allow the Biden administration the ability to restrict U.S. crypto exchanges from receiving payments from Russia. The proposals would also authorise U.S. officials to punish international exchanges that facilitate transactions by sanctioned Russian persons or entities.
transactions by sanctioned Russian persons or entities.
The regulation poses a major danger to the sector, which opponents claim has become popular for covert transactions since they cannot be tracked. If the regulation is implemented, it will damage the essence of digital currencies by subjecting them to the same requirements currently in use by federally insured banks as against the anonymity enjoyed by digital currency users.
The group has claimed that it’s aiding the Congress to “distinguish between reality and myth on the impossibility of Russia to transfer huge quantities of money through crypto transactions in order to dodge sanctions,” as stated by the group’s spokesperson. A Forbes Tate Partners spokesman declined to comment, pointing CNBC to the Blockchain Association for questioning.
Jake Chervinsky, the policy leader of the Blockchain Association, subsequently stated the legislation is not only hunting the Russian oligarchs but will also be aimed at the US crypto enterprises. “These legislations don’t target Russian oligarchs, who aren’t utilising (& can’t utilise) crypto to escape sanctions. They target upstanding US crypto firms for no obvious reason beyond @SenWarren’s fight against a technology she doesn’t comprehend,” Chervinsky remarked in a tweet following the publication of the report.
The lobbying effort has increased significantly as the current US administration is at the crossroad of either regulating digital assets or not. The President signed an executive order in the previous month that tasked regulators with the need to weigh the pros and cons of cryptocurrencies and the best approach the administration should take in terms of regulation.
Essentially, the organisation is campaigning against the Russian Digital Asset Sanctions Compliance Act, according to its first-quarter report. The House bill would target Russians and their affiliated corporations who try to employ bitcoin to get past their own sanctions.