The G7 countries issued a joint statement saying they will “ensure that the Russian state and elites, proxies and oligarchs cannot use digital assets as a means to evade or offset the impact of international sanctions.” Meanwhile, the US Treasury Department is “closely monitoring any attempts to circumvent or violate Russia-related sanctions, including through the use of virtual currency.”
G7 Committed to Ensuring Russia Can’t Dodge Sanctions with Cryptocurrency
On Friday, the leaders of the G7 countries issued a joint statement regarding further sanctions against Russia. The statement explained that since Russian President Vladimir Putin launched an invasion of Ukraine on February 24, “our countries have introduced broad restrictive measures that have severely disrupted Russia’s economy and financial system.”
Among the measures that the G7 countries have committed to take going forward are “maintaining the effectiveness of our restrictive measures, curbing evasions and closing loopholes.”
Details in the joint G7 statement:
In particular, in addition to other planned anti-evasion measures, we will ensure that the Russian state and elites, proxies and oligarchs cannot use digital assets as a means to evade or offset the impact of international sanctions.
The G7 leaders noted that this would “further limit their access to the global financial system.” They emphasized: “It is generally accepted that our current sanctions already apply to crypto assets.”
The statement continues:
We are committed to taking action to better detect and stop any illegal activity, and we will pass the costs on to illegal Russian entities using digital assets to increase and transfer their wealth, in accordance with our national processes.
The US Treasury is monitoring the crypto sector to prevent sanctions evasion
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) also released guidance on Friday “to guard against potential attempts to use virtual currency to evade U.S. sanctions on Russia.” The guidance stresses that all U.S. residents must “comply with OFAC rules, whether the transaction is denominated in traditional fiat currency or virtual currency.”
“Americans wherever they are, including firms processing virtual currency transactions, should be vigilant about attempts to circumvent OFAC rules and should take risk-based measures to ensure they do not engage in prohibited transactions.” , the manual says, adding:
OFAC closely monitors any attempt to circumvent or violate Russia-related sanctions, including through the use of virtual currency, and is committed to using its broad enforcement powers to combat and promote violations.
Treasury Secretary Janet Yellen said last week that the Treasury Department was monitoring cryptocurrency use to avoid sanctions, and the Financial Crimes Enforcement Network (FinCEN) issued red flags regarding potential sanctions evasion using cryptocurrency.
What do you think of the efforts of the G7 governments to prevent the use of cryptocurrencies to circumvent sanctions? Let us know in the comments below.
Kevin Helms
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