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Washington, D.C. – House Foreign Affairs Committee Lead Republican Michael McCaul along with other House Foreign Affairs Committee Republicans sent a letter to President Biden asking for more information about their engagement with our allies and partners on digital assets, such as cryptocurrency, and what efforts have taken place within the administration to ensure Putin is not using digital assets to dodge sanctions. 

After this letter was sent, President Biden announced an executive order regarding digital assets. The executive order requires reports on many of the issues raised by the letter including what work is being done with our allies and partners in relation to this important emerging technology—we look forward to the administration answering the questions raised in the letter.

The letter was signed by:

Lead Republican Michael McCaul (R-TX), Rep. Steve Chabot (R-OH), Rep. Joe Wilson (R-SC), Rep. Adam Kinzinger (R-IL), Rep. Brian Fitzpatrick (R-PA), Rep. Greg Steube (R-FL), Rep. Peter Meijer (R-MI), and Rep. Young Kim (R-CA) 

“In the wake of Vladimir Putin’s renewed invasion of Ukraine and the administration’s post-invasion sanctions, we write today to encourage your administration to work with our allies and partners to ensure that Russia is not able to circumvent those sanctions through the use of digital assets,” the lawmakers wrote. “It is critical that we work together to promote common understanding of how digital assets are used and how sanctions can be most effectively applied.”

The full text of the letter can be found here and below. 

Dear President Biden,

In the wake of Vladimir Putin’s renewed invasion of Ukraine and the administration’s post- invasion sanctions, we write today to encourage your administration to work with our allies and partners to ensure that Russia is not able to circumvent those sanctions through the use of digital assets. It is critical that we work together to promote common understanding of how digital assets are used and how sanctions can be most effectively applied.

The underlying technology for most of these digital assets is a digital distributed ledger known as blockchain. That ledger is a real-time public accounting of transactions. Through the blockchain, each participant can transparently and securely transfer digital assets “person to person” without the need for an intermediary.

Digital assets, for example, have played a role in providing aid around the globe allowing people to directly give money to important causes without the delay often associated with other conventional means such as sending personal checks and money orders. Of note, we are seeing donations in the form of digital assets from around the world flood into Ukraine.

At the same time, there is also concern that Russia, like Iran and North Korea, may use digital assets to evade sanctions. It has been widely reported that a forthcoming United Nations report will lay out how North Korea has used ransomware to steal cryptocurrency to directly fund its nuclear program and evade sanctions. Now more than ever we must work with our allies to close potential gaps in sanctions measures and ensure digital asset trading platforms are fully complying with sanctions and identifying exposure to sanctioned parties in order to help stop Russia’s actions against Ukraine.

The United States and its allies have taken critical steps toward isolating Russia, and now we must continue coordinating to ensure that these actions fully achieve their intended costs— preventing Russia from powering its war machine. To that end we request the following information:

  • To what extent is the administration working with allies and partners to mitigate the use of digital assets by Russia to evade sanctions?

  • Please describe what work the administration is doing with which allies and partners to help fill any gaps in sanctions enforcement that may be exploited by Russia via Russia’s potential use of digital assets?

  • What communication, if any, has the administration had with digital asset trading platforms to ensure compliance with sanctions?

  • Has the administration directed any additional resources towards enforcing sanctions to ensure that Russia feels the maximum impact?

  • Does the administration need more resources to address this new challenge to our sanctions regime?

  • Who is the lead government entity for coordinating the U.S. government response to this potential use of digital assets by Russia and other rogue states?

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