scorecardA US Treasury official has warned crypto exchanges that help Russia skirt sanctions: 'We will come, and we will find you'
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A US Treasury official has warned crypto exchanges that help Russia skirt sanctions: 'We will come, and we will find you'

Adam Morgan McCarthy   

A US Treasury official has warned crypto exchanges that help Russia skirt sanctions: 'We will come, and we will find you'
Investment2 min read
  • The U.S. will hold anyone helping Russia to sidestep sanctions to account, an official told CNBC.
  • "We will come, and we will find you," the deputy U.S. Treasury secretary said Tuesday.

The US will track down and hold to account crypto exchanges and anyone else who helps Russia sidestep sanctions, a top Treasury official has warned.

Russia has been hit with stringent financial and economic measures by the US and its allies over its invasion of Ukraine. But US lawmakers, among others, are concerned about the possibility those targeted might try to bypass the sanctions using digital assets.

"What we want to make very clear to crypto exchanges, to financial institutions, to individuals, to anyone who may be in a position to help Russia take advantage and evade our sanctions: We will hold you accountable," Wally Adeyemo said in a CNBC interview Tuesday.

"We will come, and we will find you," the deputy US Treasury secretary said.

Earlier in March, the US and its G-7 allies vowed to close loopholes that could let the Russian state and oligarchs use digital assets to cushion or get around sanctions, as they stepped up their crackdown on evasion.

Since the start of the invasion in late February, some crypto exchanges have faced criticism for continuing to allow Russians to use their platforms. But Coinbase CEO Brian Armstrong, and Kraken CEO Jesse Powell have pleaded the innocence of ordinary Russian citizens.

A group of Democratic senators has introduced a bill calling for the White House to report on crypto service providers with links to Russia. It would also give the Treasury powers to stop crypto exchanges from handling transactions involving Russia-linked addresses.

Adeyemo said cryptocurrencies and shell companies could be used to get around sanctions, but he acknowledged there was no evidence of this.

"We have not seen to date that Russia has been able to evade our sanctions in a meaningful way, but we know that they are attempting to do so, and we know they are going to try and use every means possible," he told CNBC.

Read more: A little-known prop shop manages more than $100 million of crypto. The firm's cofounder outlines his strategies for finding high-upside trades — and how his team identifies which tokens to target.

But Christine Lagarde, the president of the European Central Bank, said last week that Russia's private sector was using digital currencies for evasion. She noted the volume of rubles being exchanged for crypto has hit its highest point since May 2021.

Crypto assets "are certainly being used, as we speak, as a way to circumvent the sanctions that have been decided by many countries around the world against Russia and a specific number of players," Lagarde said.

Some in the crypto industry have pointed out that on-chain analytics and the open-source nature of cryptocurrencies like bitcoin make it simple to track transactions. That means Russians would not be able to carry out transactions unnoticed, they argue.

A practical and verifiable example of cryptocurrency being used in the conflict are the donations received by Ukraine, which have now surpassed $100 million.

Ukraine's government has used the millions of dollars in bitcoin and other funds raised to buy protective gear and food, Alex Bornyakov, its deputy minister of digital transformation, said.

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