Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crime control at the US Treasury Department, suggested that sanctioning cryptocurrency mixers could help bolster the government’s response to foreign entities seeking to use cryptocurrency. digital assets for illicit purposes.
At a hearing Tuesday by the Senate Banking Committee on Russia sanctions, Rosenberg said that the fact that the Treasury Department added cryptocurrency mixers like Blender.io or Tornado Cash to its list of Specially Designated Nationals could be an effective way of signaling that the US government was acting to prevent entities from circumventing sanctions .
“When sanctions can serve as a deterrent to any criminal who intends to use a mixer to launder their funds […] that’s an effective way we can use to signal that we can’t tolerate money laundering,” Rosenberg said. “Whether it’s for a Russian, Iranian, North Korean criminal actor or wherever they’re from.”
He further added:
“Technologies that enhance anonymity, such as mixers […]are really a concern to understand the flow of illicit finances and to go after them.”
Rosenberg responded to questions from Massachusetts Sen. Elizabeth Warren, who said some in the crypto space were “furious” about the Treasury’s sanctioning of mixers and suggested Russian oligarchs could use digital assets to circumvent efforts intended to to economically impact people and entities linked to the war in Ukraine. Many in the space have criticized Treasury’s actions, including Coinbase — the cryptocurrency exchange announced on September 8 that it would be funding a lawsuit against the government department challenging sanctions on Tornado Cash.
In addition to mixers, including Blender.io and Tornado Cash, Treasury targeted specific Bitcoin (BTC) addresses allegedly linked to individuals from a Russian neo-Nazi paramilitary group and an Iran-based ransomware group in September. Amid criticism and uncertainty among cryptocurrency users, Treasury later clarified that no one was prohibited from sharing the Tornado Cash code on websites or posts.
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