As the economic sanctions imposed by President Biden’s administration and other countries begin to take their toll on the Russian economy, Sen. Angus King of Maine wants to ensure that Russian President Vladimir Putin is unable to skirt those sanctions by tapping into cryptocurrency and other digital assets to fund his invasion of Ukraine.
King, an independent, and several colleagues in the Senate are co-sponsoring the Digital Asset Sanctions Compliance Enhancement Act, which is aimed at limiting the ability of Putin and Russian oligarchs to evade economic sanctions by using digital assets such as cryptocurrencies to fund Russia’s war in Ukraine.
The legislation would prohibit any Russian digital assets from being traded in U.S. jurisdictions, enact new cryptocurrency transparency requirements and would give the Biden administration additional powers to go after Russian digital assets. King said the bill is necessary because of strong indications that “Russian actors” may try to evade economic sanctions by using digital currencies.
Russian financial institutions have been banned from SWIFT, the international payments messaging system, and the Russian central bank’s foreign assets have been frozen. In addition, the international community has taken steps to locate and freeze the assets of Russian elites, while large corporations such as Visa and Mastercard, have curtailed operations in Russia. The sanctions have restricted Russia’s access to the global financial system.
“As the united sanctions of America and our allies devastate Russia’s economy, we must ensure that Putin cannot exploit any financial loopholes to escape the consequences of his crimes,” King said in a statement issued Monday. “If we don’t take action, digital assets and cryptocurrencies could provide Putin and his oligarchs the exact lifeline they’re looking for and extend this attack longer.”
King said the legislation will “crack down on Russia’s ability to digitally launder their assets, create much needed transparency, and ensure Russia feels the weight of their heinous attacks on a sovereign neighbor.” It also would discourage foreign crypto firms from conducting business with sanctioned Russian elites and provide the Biden administration with the authority to suspend transactions with Russia-linked crypto addresses.
Russia’s invasion of Ukraine on Feb. 24 has taken a heavy toll. The United Nations estimates that more than 10 million Ukrainians have been forced to flee their homes. Several Ukrainian cities and towns have been reduced to rubble by Russian missile and tank assaults.
The Digital Asset Sanctions Compliance Enhancement Act is still pending Senate action, but King is currently exploring the possibility of combining the crypto legislation with another bill he introduced in March that would freeze Russia’s gold reserves. King said that by combining the two bills it would “tighten the financial noose” around Putin and his oligarch backers.
King, a member of the Senate Intelligence Committee, Armed Services Committee and its Energy and Natural Resources Committee, last month warned that Putin is likely to lash out with cyberattacks aimed at the United States and other countries as his frustration builds over Ukrainian resistance to his invasion and the near universal condemnation of his actions.
“Right now, Vladimir Putin is the most dangerous single individual in world history,” King told reporters last month during a virtual news conference. “He has nuclear weapons. He has this dream of reuniting Russia and creating a greater Russia. He’s paranoid about the West.”
King and Republican Sen. Susan Collins visited Germany and Poland last month, a tour that gave them a firsthand perspective on how Russia’s invasion of Ukraine has impacted the citizens of that country as well as America’s allies on NATO’s eastern flank.