The crypto industry has quietly lobbied US lawmakers against legislation designed to prevent Russian oligarchs from using digital currencies to evade sanctions imposed on cryptocurrencies. allies of Russian President Vladimir Putin and their companies after Russia’s attack on Ukraine.
The Blockchain Association, a lobbying group representing more than 70 crypto platforms including Ripple, Crypto.com, and Dragonfly Capital, is trying to convince Congress that cryptocurrencies are not being used by Russians. rich to avoid sanctions. It is working with lobbying outlet Forbes Tate Partners to fight legislation imposing sanctions on already fined Russians who are aiming to use crypto as a way to avoid sanctions. The bill would also empower the Treasury Secretary to block US-based cryptocurrency trading platforms from doing business with those in Russia.
Two bills was introduced in the US House and Senate, granting the Biden administration the power to ban US crypto exchanges from processing payments from Russia. The bills would also allow US authorities to sanction foreign exchanges that process transactions by sanctioned Russian people or companies.
The act poses a serious threat to the industry, which critics say has become popular for secret transactions because they cannot be traced. It will essentially force digital currencies to follow some of the same rules that require federally insured banks to know their customers, combat money laundering, and report suspicious transactions to banks. management agency.
The group said it is helping Congress “separate fact from fiction about Russia’s inability to move large sums of money through cryptocurrency transactions to evade sanctions,” said Curtis Kincaid, a spokesman for the group. group, said in an email. A representative for Forbes Tate Partners declined to comment, referring CNBC to the Blockchain Association for questions.
The crypto industry has ramped up lobbying efforts as the Biden administration scrutinizes whether and how to regulate digital assets. President Joe Biden Signed An executive order in March urged regulators to examine the risks and benefits of cryptocurrencies.
The Blockchain Consortium spent $460,000 on its own internal lobbyists in the first quarter, a record amount since it launched. 2018, lobbying disclosure records show. The crypto lobbying outlet says it received over $4 million in donations last year from three crypto giants: Digital Currency Group, Kraken, and the Filecoin Foundation.
The group is lobbying against Russia’s Digital Asset Sanctions Compliance Act, according to their first-quarter report. The House bill would target Russians and their affiliated companies who try to use cryptocurrency to avoid their own sanctions. Cryptocurrency Industry Leaders Say Digital Currencies Can’t Be Used To hide sanctions.
However, some lawmakers argue that digital currencies should be regulated like banks because the industry sees itself as an alternative banking system. The US has sanctioned a lot of financial institutions based in Russia, including central bank. The Ministry of Finance recently took aim at bitcoin miner operating in Russia.
“The crypto industry imagines itself as an alternative financial system, an alternative bank. Banks have been sanctioned left, right and center, and banks are pulling out of Russia,” Dan said. Representative John Garamendi of California, who co-sponsors the House bill, told CNBC in a recent interview. “So if they imagine themselves a financial mechanism, they’re in the same league, in the same circumstances, as Bank of America or bank of Russia.”
The group is also lobbying on the accompanying bill sponsored by Senator Elizabeth Warren, D-Mass., in the Senate, according to their first-quarter lobbying disclosure report. The bill, called the Digital Asset Sanctions Enhancement Compliance Act of 2022 – a name akin to the name given by House Democrats – is also designed.” to impose sanctions on the use of cryptocurrencies to facilitate transactions by Russians subject to the sanctions,” according to a summary of the bill.
Warren, a member of the powerful Senate Banking and Finance committees, recently told National Public Radio that the bill is supposed to give the Treasury Department tools to increase oversight of financial institutions. cryptocurrency platform.
“Russian oligarchs can continue to use crypto to move their money. So we’re giving the Treasury authorization to treat these crypto platforms like banks. That is, you have to know your client, and Warren said in an interview last month.
Warren accused the crypto industry of undermining US national security and sanctions against Russia.
Warren said in an emailed statement.
The Mortgage Bankers Association, an advocacy group for the mortgage finance industry, similarly lobbied against the Klepto Act, a bipartisan bill supported by Warren, along with Sens. Whitehouse, DR.I; Bill Cassidy, R-La .; and Roger Wicker, R-Miss, according to the group’s first-quarter report. A representative for the Mortgage Bankers Association did not return a request for comment.
The act is designed to expose the “real estate holdings” of financiers, kleptocrats, and international criminals hiding in the United States, strengthens U.S. anti-money laundering protections, and provides give law enforcement the information needed to track down kleptocrat luxury assets in the U.S. Financial System,” according to a press release.