U.S. Senators Press Biden Administration on Cryptocurrency Use by Sanctioned Entities

U.S. Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) are urging the Biden administration to address the use of cryptocurrency, particularly Tether, to evade sanctions in Russia, Iran, and North Korea. In an April 28, 2024 letter, the senators expressed concerns about Tether's potential role in allowing sanctioned entities to access the global financial system.

The senators mentioned reports of Russian middlemen using Tether to source weapons parts and Venezuela's state-run oil company planning to use Tether in its crude and fuel exports. They noted that even though Tether's preferred crypto trading platform Garantex has been sanctioned, it is unclear if these actions have stopped the flow of funds through the platform.

Why this matters: The use of cryptocurrencies like Tether by sanctioned entities poses a significant national security threat. It emphasizes the need for strong regulations and oversight to prevent digital assets from being exploited to circumvent economic sanctions imposed by the U.S. and its allies.

Senators Warren and Marshall asked officials, including Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin, what additional authorities might be needed to prevent digital assets from being used to evade sanctions. "The national security threat posed by cryptocurrency requires a commensurate response by our country's defense community," the senators cautioned in their letter.

Tether has previously stated that it respects the U.S. Treasury's list of sanctioned entities and is committed to ensuring sanctioned crypto wallet addresses are frozen. However, the senators' letter highlights the growing scrutiny on how cryptocurrencies could be used to undermine international sanctions and the pressing need for effective measures to address this issue.

Key Takeaways

• Senators Warren and Marshall urge Biden admin to address crypto use to evade sanctions.
• Concerns raised about Tether's role in allowing sanctioned entities to access global finance.
• Senators ask for additional authorities to prevent digital assets from evading sanctions.
• Tether claims to respect sanctions, but senators highlight need for effective measures.
• Cryptocurrencies pose a significant national security threat, requiring a strong response.