Elizabeth Warren and Co-Sponsors Introduce Digital Asset Sanctions Compliance Enhancement Act
On March 17th, Senator Warren and Democratic co-sponsors introduced a new bill that would enhance restrictions on cryptocurrencies, under the premise that Russia is using this ecosystem to evade sanctions.
This bill would place restrictions on those who develop, operate and use cryptocurrency networks as well as sharpen U.S. government to act against exchanges that transact with Russian addresses. Other provisions in the bill would require any U.S taxpayer to report crypto transactions valued at $10,000 or more with any offshore entity to FinCen (U.S Treasury's Financial Crimes Enforcement Network).
This bill has been introduced despite no data suggesting that cryptocurrencies have been used to meaningfully evade sanctions. The DOJ, Treasury and several White House officials have reiterated that cryptocurrencies have been a poor tool to evade sanctions. In the video tweeted below (from Neeraj Agrawal from Coincenter), Jony Levin (Co-founder of chainalysis) completely exposes Senator Warren's inability to grasp the concept that obfuscating billions of dollars worth of cryptocurrencies is still a very difficult task due to liquidity - essentially meaning large scale sanction evasions using cryptocurrencies are not currently possible.
While this bill is overbroad and overreaching, Jerry Brito from Coincenter emphasized on 3/17 that there should be no reason to ring the alarm. He notes that this bill does not have bipartisan support, and unlike previous attempts to introduce overreaching bills, there is no must-pass attachment. It also has implications that are against expert recommendations.
He notes it may be detrimental to sound "hands-on-deck red alert" over every crypto bill that gets introduced. Calling every random House member may do more harm in a situation where they no nothing about this bill. However, if one of the co-sponsors is your Senator it may be worth calling and politely explaining that this is not a good idea.
With that being said, seeing who votes to pass this bill (which is not attached to any other bill) will expose these members as to where they lie on cryptocurrency regulations. After that you may see the influence of an emerging cohort of one-issue pro-cryptocurrency voters make their presence known in future elections.