Pressure Mounts on Biden Administration to Address Crypto Use in Sanction Evasion

Two lawmakers, Elizabeth Warren, D-Mass., and Roger Marshall, R-Kan., are urging the Biden administration to address the use of cryptocurrency in evading sanctions in countries like Russia, Iran, and North Korea. They are seeking additional authorities to prevent digital assets, particularly stablecoin Tether, from being utilized by sanctioned entities in Russia and other nations.

In a letter sent on Sunday to officials including Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin, Warren and Marshall expressed growing concerns about how cryptocurrencies could be exploited to bypass sanctions. They specifically highlighted worries about Tether, a stablecoin pegged to the U.S. dollar.

Recent reports, such as one from The Wall Street Journal, have revealed instances where Russian middlemen used Tether to evade Western sanctions for procuring weapons parts. Additionally, Reuters reported that Venezuela’s PDVSA plans to incorporate Tether in its crude and fuel exports amidst impending oil sanctions from the U.S.

Warren and Marshall emphasized the need for a robust response from the defense community to address the national security threats posed by cryptocurrency. They questioned the efficacy of sanctions imposed on Tether’s trading platform Garantex in halting fund flows.

A spokesperson for Tether emphasized the traceability of actions involving the cryptocurrency and reassured compliance with regulatory authorities. They highlighted collaborations with law enforcement agencies worldwide to prevent misuse of Tether.