Yellen says no ‘significant’ Russian use of crypto to evade sanctions

Yellen says no ‘significant’ Russian use of crypto to evade sanctions

By Benson Toti - min read

US Treasury Secretary Janet Yellen said this while appearing before the US House Financial Services Committee on Wednesday.

With sanctions hitting Russia hard since its invasion of Ukraine, and foreign reserves drying up, some people have opined that the country could turn to crypto to try to evade the sanctions.

Leading exchanges, including Coinbase and Kraken, have previously said it’s unlikely that Russia will take this route. 

But while the US has warned exchanges against “helping” Russia by facilitating suspicious transactions, experts’ overall assessment is that crypto is an unlikely option.

No “significant” crypto for sanctions evasion

US Treasury Secretary Janet Yellen has added her voice to this outlook, with her comments coming during a House Financial Services Committee on Wednesday.

We are aware of the possibility, clearly, that crypto could be used as a tool to evade sanctions and we are carefully monitoring to make sure that doesn’t occur,” Yellen noted.

However, she told legislators that the US has the capacity to tell if there were any large-scale transactions related to Russia. She added that authorities were on top of this, with her remarks suggesting that there has been no ‘significant” pointer to Russia using crypto to evade sanctions.

We haven’t seen significant evasion through crypto so far, but we’ll monitor carefully and use our authorities that we do have to make sure that this isn’t a major avenue for evasion,” the former US Federal Reserve Chair said in her testimony before the House committee.

In early March, Yellen said that talk of crypto being used to evade sanctions was there. However, she reiterated that federal authorities were monitoring the sector and that most crypto exchanges likely to be used are subject to AML (anti money laundering) guidelines.

The platforms also have to adhere to sanction rules, and that it’s not a sector through which evasion can “completely” be advanced, she added.

Yellen’s remarks mirror conclusions drawn by blockchain analytics firm Chainalysis, whose testimony before the US Senate Banking Committee in March also pointed to no significant evidence on the blockchain.

On Wednesday, US legislators introduced a bill that seeks to have US-based exchanges ban transactions for Russia-based users. The new bill also seeks to give President Joe Biden powers to sanction foreign-based crypto exchanges that would be deemed to be helping Russia.