US Senator Elizabeth Warren Claims Nations Are Using Cryptocurrencies to Evade Sanctions, Contradicted by Community Notes
US Senator Elizabeth Warren cited a report from the US Government Accountability Office (GAO) that states that countries or entities are using cryptocurrencies to evade sanctions, and called for cryptocurrencies to follow the same anti-money laundering regulations as other financial sectors. However, the opinion of the community seems to be contrary to hers.
Elizabeth Warren: It’s Time for Cryptocurrencies to Follow Anti-Money Laundering Regulations
The report claims that regulatory agencies are taking action
Community notes contradict Treasury report: Fiat currency is the preferred tool for money laundering
Coin Center: Misleading and false statements
Misconception: Cryptocurrencies do not follow the same anti-money laundering rules
Misleading: No background provided on the scale of cryptocurrency money laundering
As a representative opposing blockchain and cryptocurrencies, US Democratic Senator Elizabeth Warren cited a report released by the US Government Accountability Office (GAO) in December in a tweet on the 21st, claiming that countries currently under sanctions are using cryptocurrencies to evade sanctions and undermine national security:
“It’s time for cryptocurrencies to follow the same anti-money laundering rules as everyone else, and I have a bill to make it happen.”
As expected, Warren took the opportunity to promote her previously proposed Digital Asset Anti-Money Laundering Act.
According to the report titled “The Effectiveness of Economic Sanctions Threatened by the Growth of Digital Assets,” the GAO claims that an increasing number of countries, including Iran and North Korea, that are under US sanctions are using Bitcoin or other digital assets to evade the impact and obtain illegal funds from other criminal activities.
The GAO also emphasized that the US Department of Justice and the Treasury Department are taking action to address the risks posed by the development of digital assets, including charging individuals or companies involved in using cryptocurrencies to evade sanctions:
“In November last year, the Treasury Department reached a nearly $4.4 billion settlement with the exchange Binance and its subsidiaries for violating US anti-money laundering laws.”
Interestingly, users on X also added a community note under the tweet, quoting the US Treasury Department’s “National Money Laundering Risk Assessment” report from February 2022, stating that “fiat currency is the preferred currency for financial crimes,” mocking Warren’s statements.
In addition, Peter Van Valkenburgh, Research Director at the cryptocurrency advocacy organization Coin Center, also commented to object, stating that Warren’s statements contain incorrect or misleading content.
Valkenburgh referred to the guidance issued by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) in 2013, which explains that cryptocurrencies have already been compliant with anti-money laundering regulations:
“In fact, over the past 11 years, cryptocurrency activities have been subject to the same anti-money laundering rules as traditional financial activities, and these rules are often enforced, including user identification (KYC) and reporting financial transactions under the Bank Secrecy Act.”
However, he also mentioned that individuals conducting transactions using personal wallets are not bound by the Bank Secrecy Act; however, individuals using cash and other financial instruments may also be exempt from its regulations.
Furthermore, Valkenburgh also pointed out that Warren’s tweet did not provide more background information on the scale of money laundering using cryptocurrencies, but only implied, from a personal standpoint, that cryptocurrencies are more suitable for evading sanctions than traditional financial tools:
“However, that’s not how the Treasury report is written. Fiat currency is.”
Coin Center
Elizabeth Warren
Digital Asset Anti-Money Laundering Act
Community notes
US Treasury Department
