Amo Leads Effort to Crackdown on Cryptocurrency Funding of Russia’s Vicious Onslaught in Ukraine
Letter to Treasury Secretary Janet Yellen probes possible sanction evasions and prevention methods

WASHINGTON, DC – Congressman Gabe Amo (RI-01) led a letter to U.S. Treasury Secretary Janet Yellen expressing concerns that a Moscow-based cryptocurrency exchange, Garantex, is reportedly facilitating sanctions evasion and helping fund Russia’s illegal invasion of Ukraine. Specifically, Congressman Amo requested information from Secretary Yellen on how the United States can successfully restrict the flow of currency into Russia’s economy to prevent illicit actors from skirting multilateral sanctions that have been imposed on Russian entities since February 2022. The letter was also signed by Subcommittee on Capital Markets Ranking Member Brad Sherman (D-CA) and Congressman Gerald E. Connolly (D-VA).

“We write to express our concern about recent reporting that $20 billion of cryptocurrency passed through the Moscow-based cryptocurrency exchange Garantex, evading United States sanctions and funding Russia’s vicious onslaught against Ukraine,” wrote the members. The members continued, “Recent reporting suggests that $20 billion in cryptocurrency passed through Garantex using Tether stablecoins after these sanctions against the company went into effect in April 2022. We are concerned that billions of dollars of sanction evasions may have occurred on this cryptocurrency exchange that could have been used to fund Russia’s war against Ukraine.”

BACKGROUND
In February of 2022, the United States joined its allies around the world in responding to Russia’s invasion of Ukraine by imposing sanctions on Russian companies and officials. Two months later, the United States and the United Kingdom expanded sanctions to include Garantex, a Moscow-based cryptocurrency exchange operating within Russia’s financial services market. Sanctions on Garantex formed part of a U.S. Treasury Department effort to further crack down on sanctions evasion in Russia.

Full text of the letter sent to Secretary Yellen can be found HERE and below.

Dear Secretary Yellen:

We write to express our concern about recent reporting that $20 billion of cryptocurrency passed through the Moscow-based cryptocurrency exchange Garantex, evading United States sanctions and funding Russia’s vicious onslaught against Ukraine.

After Russia invaded Ukraine in February 2022, the United States imposed sanctions on Russian companies and high-ranking Russian officials, to hold Russia accountable for its aggression abroad and repression at home. A strong sanctions regime is needed to end the unlawful war against Ukraine and restrict the flow of currency into Russia. The United Kingdom, European Union, Australia, and Japan imposed similar sanctions against Russian companies and officials.

In April 2022, as part of the effort to restrict funding to Russia, the United States and United Kingdom sanctioned Garantex, a Moscow-based cryptocurrency exchange. The Treasury Department found that Garantex facilitated over $100 million in transactions associated with illicit actors and sanctioned Garantex for operating within the financial services market of the Russian economy. Garantex is deeply connected to the Russian economy and states on its website that it allows withdrawal from the cryptocurrency exchange to Russian banks on the United States sanctions list. The Treasury Department stated that sanctioning Garantex reinforces efforts to cut off avenues for potential sanctions evasion to Russia.

Recent reporting suggests that $20 billion in cryptocurrency passed through Garantex using Tether stablecoins after these sanctions against the company went into effect in April 2022. We are concerned that billions of dollars of sanction evasions may have occurred on this cryptocurrency exchange that could have been used to fund Russia’s war against Ukraine. We therefore request the following information:

  1. What steps is the United States taking to stop potential sanctions evasion using cryptocurrency exchanges like Garantex?
  2. What role, if any, is the stablecoin Tether playing in sanctions evasion to Russian through Russia friendly cryptocurrency exchanges like Garantex?
  3. What steps is the United States taking to prevent other cryptocurrency exchanges from participating in sanctions evasions to Russia?
  4. Has the United States blocked or seized any digital assets associated with Garantex?
  5. How much currency has evaded sanctions to Russia through cryptocurrency?
  6. Does the United States have an estimate of what percentage of sanction evasions to Russia has moved through cryptocurrency exchanges since the sanctioning of Garantex in April 2022?
  7. Are there any additional statutory tools the Administration needs to prevent sanction evasion through cryptocurrency exchanges like Garantex?

The costs to the United States, partners in Europe, and around the world face increased costs if sanctions evaders do not pay the price for the death and destruction we are seeing in Ukraine. We appreciate your attention to our request and look forward to your response.

 

 

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