There's no evidence Putin is using cryptocurrencies to dodge sanctions and Russia's too big for that anyway, crypto experts tell lawmakers

• There's no evidence Vladimir Putin or Russia are using crypto to evade sanctions, experts told a Senate committee.
• "You can't flip a switch overnight, and run a G20 economy on cryptocurrency," a FinCEN official said Thursday.

There's no sign Russia's government or its leader President Vladimir Putin are using cryptocurrencies to dodge sanctions imposed over its war with Ukraine, industry experts told US lawmakers.

Concerns have grown recently among Democratic senators about the possibility of digital assets being used this way, especially in light of a warning from the US Treasury in October that decentralized digital assets could provide a workaround.

"We have not seen any evidence of Russia or Putin systematically using cryptocurrencies to evade sanctions at the moment," Jonathan Levin, chief strategy officer at Chainalysis, $4 Thursday.

At the same time, the crypto market is too small for economies as large as Russia to carry out widescale evasion via digital assets, the expert panel $4.

"You can't flip a switch overnight, and run a G-20 economy on cryptocurrency," Michael Mosier, a deputy director at US enforcement agency FinCEN, told lawmakers.

"It's an access problem, it's a rails problem, and it's just a basic liquidity problem. Certainly, there's going to be an element [of crypto] that's part of their playbook. But it frankly isn't at the top of the list."

Levin, who is also co-founder of blockchain analysis company Chainalysis, said illicit activity like sanctions avoidance is relatively easy to detect and monitor, due to the "immutable and transparent nature of blockchains."

Sanctioned individuals are more likely to use alternative currencies and payment networks, or traditional money-laundering schemes like the "$4", rather than using digital assets, he said. These routes aren't directly traceable using blockchain tools.

A high risk of detection and seizure are factors that could discourage Russians from using crypto to sidestep sanctions, according to Levin.

Russia is now the $4 after its invasion of Ukraine on February 24, which threatens to hobble its economy. Sanctions imposed by the US and its allies mean that $4 have no access to the international SWIFT payments system, and the country is effectively cut off from the global financial system.

On Wednesday, Sen. Elizabeth Warren and 11 other Democrats $4 to allow the US government to block transactions with Russian-linked crypto addresses.

The US Treasury last week $4 to be vigilant of Russian oligarchs and state actors attempting to use crypto in sanctions evasion.

FinCEN's Mosier noted that exchanges, unless they are based in Russia, would be hesitant to conduct transactions in exchange for rubles. The Russian currency plunged to a $4 in the wake of the sanctions.

Russia's central bank said Thursday it had $4 to issue and exchange digital assets, despite the country's long history of skepticism of crypto, including a $4.

Sberbank, Russia's biggest lender, said Friday that sanctions now mean its customers can't transfer funds in dollars and other foreign currencies to bank accounts in Russia and abroad, $4.

At the Senate hearing, Sen. Patrick Toomey said there is no completely bullet-proof sanctions regime.

"It's quite possible that an oligarch somewhere may be using a variety of tools, including crypto, to try to hide some assets," he said.

"But according to administration officials across multiple agencies, there is simply no evidence of cryptocurrencies being used by Russia to evade sanctions in any significant way."

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