U.S. Lawmakers Introduce Bill That Could Force Crypto Exchanges to Cut Links to Russian Wallets

Rep. Brad Sherman is set to introduce a bill in the House of Representatives aimed at cracking down on U.S. businesses that process crypto transactions for Russian banks and individuals.

During Thursday's meeting with the House Financial Services Committee, Sherman said he would introduce a companion bill to Sen. Elizabeth Warren's legislation that would give the Biden administration "clear authority to require cryptocurrencies subject to U.S. law." Exchanges stop facilitating transactions with Russian crypto wallets.” Warren first announced the legislation on March 8, before saying at a Senate Banking Committee hearing that she would introduce the bill on Thursday.

The text of both bills was not available through the Congressional Record as of this writing. However, Warren’s proposed legislation would reportedly authorize the Treasury Department to prevent cryptocurrency exchanges under U.S. jurisdiction from processing transactions from any crypto addresses of Russian citizens. Additionally, U.S. taxpayers will be required to report any foreign cryptocurrency transactions over $10,000 to the Financial Crimes Enforcement Network (FinCEN).

“I look forward to working with my colleagues to ensure that one of the tools available to the government is the ability to tell cryptocurrency exchanges that if they do business in the U.S., they cannot do business with Russia-based crypto wallets until this crisis,” Sherman said. The crisis is over."

Rep. Brad Sherman speaks before the House Financial Services Committee on Thursday

Sherman, who has made several previous statements against cryptocurrencies, including calling for a ban on digital assets, cited a statement by Ukraine’s minister of digital transformation requiring all exchanges to “block the addresses of Russian users,” seemingly without limiting the ban to the U.S. and U.S. Individuals and companies on the EU sanctions list. Binance CEO Changpeng Zhao said the company would comply with the sanctions but would not block transactions related to all Russian crypto wallets, while Kraken CEO Jesse Powell said there must be a legal requirement for the exchange to freeze accounts in Russia .

“We will not unilaterally freeze the accounts of millions of innocent users,” a Binance spokesperson told Cointelegraph in February. "Cryptocurrencies are designed to provide greater financial freedom to people around the globe."

I ask all major cryptocurrency exchanges to block addresses of Russian users.

It is crucial to freeze addresses not only related to Russian and Belarusian politicians, but also to compromise the addresses of ordinary users.

— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022

Michael Chobanian, founder of the Ukraine-based Kuna cryptocurrency exchange, said on Thursday that the platform had stopped "all support for the Russian ruble." However, his call for cryptocurrency exchanges included blocking “any interaction with sanctioned individuals” and did not appear to block all wallets held by citizens, whether inside Russia or abroad.

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