US Lawmaker Urges Biden Administration to Develop ‘Robust Strategy’ to Prevent Crypto Use to Evade Sanctions

The U.S. lawmaker urged the Biden administration to develop a “robust strategy” to prevent the use of cryptocurrency to circumvent sanctions. “Emerging technologies such as cryptocurrency offer many positive uses, such as humanitarian aid, but the administration has not kept pace in ensuring that this new form of currency is not used to the detriment of U.S. national security,” he said.

Congressman McCaul wants a “robust strategy” to prevent the use of cryptocurrencies to circumvent sanctions

A senior member of the House Foreign Affairs Committee, U.S. Representative Michael McCaul (R-TX), has made several efforts to prevent the use of cryptocurrencies to circumvent U.S. sanctions. On Thursday, he issued a statement urging the Biden administration to create a “robust strategy” to prevent the use of cryptocurrencies to circumvent sanctions.

“Emerging technologies such as cryptocurrency offer many positive uses, such as humanitarian aid, but the administration has not kept pace in ensuring that this new form of currency is not used to the detriment of U.S. national security,” the congressman said, elaborating:

Punishing criminals is a good first step, but I urge the administration to develop a robust strategy to prevent bad actors from using cryptocurrency to circumvent U.S. sanctions.”

His statement followed Virgil Griffith’s sentencing to more than five years in federal prison for helping North Korea circumvent U.S. sanctions by using cryptocurrency technology.

Last month, Representative McCaul also sent a letter to President Joe Biden expressing concern about Russia’s “potential misuse of new technologies, such as cryptocurrency, to circumvent sanctions.” He referred to the “pending UN report that North Korea is using stolen cryptocurrencies to finance its nuclear program.” He did not receive a response from Biden.

The lawmaker then sent a similar letter to Director of National Intelligence Avril Haynes after her testimony before the House Permanent Select Committee on Intelligence about how her agency would combat cryptocurrency-related sanctions evasion.

Earlier this month, McCaul, along with House Foreign Affairs Committee Chairman Gregory Meeks (D-NY), introduced the Russia Cryptocurrency Transparency Act. The bill received bipartisan support and subsequently came out of the House Foreign Affairs Committee. The legislation would help “ensure that the U.S. takes the necessary steps to prevent these new technologies from being used to circumvent U.S. sanctions.”

While some lawmakers are concerned about the use of cryptocurrencies to circumvent sanctions, many experts say that cryptocurrencies are not an effective tool to circumvent sanctions. One U.S. Treasury official said in March: “We don’t see that cryptocurrency can be used on a large scale to circumvent sanctions.” Nevertheless, Senator Elizabeth Warren (D-MA) introduced a crypto-sanctions bill that “would impose broad restrictions on individuals who create, operate, and use cryptocurrency networks, even if they have no knowledge or intent to help circumvent sanctions.”

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