U.S. Senate panel pushes Treasury's Yellen to ensure Russia doesn't use cryptocurrencies to bypass sanctions

A group of countries led by the United States is redoubling its efforts to prevent Russia from using cryptocurrencies to evade sanctions.

President Joe Biden and G-7 leaders announced new economic measures to further isolate Russia from the global financial system and reduce its economy to "junk status," according to a White House briefing Friday.

These actions are expected to increase pressure on Putin to halt his ongoing offensive against Ukraine, which includes revoking Russia's most favored nation status under the World Trade Organization, meaning that Russia now no longer enjoys benefits such as low and minimal tariffs. Barriers to WTO membership.

The coalition also vowed to cut off Russia's borrowing privileges from multilateral financial institutions such as the International Monetary Fund and the World Bank, expand sanctions against Russian oligarchic families and ban the export/import of luxury goods to Russia. In a follow-up announcement, Biden also noted that they would "establish authority to prohibit new investments in any sector of the Russian Federation economy," which would oversee the sanctions at hand, particularly those related to effectively enforced energy.

According to the announcement, the U.S. has also pledged to step up efforts to prevent Russia from using cryptocurrencies to evade sanctions by implementing "new Treasury Department guidance to deter sanctions evasion. As has been reported, the threat of Russia turning to digital assets to ease its soaring economic woes has been a real threat according to the sanctioning country.

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Calls to close circumvention loopholes for Russia have become a top priority for the U.S. and its cronies, and several lawmakers in the U.S. and U.K. have called for a law that would strengthen the power of institutions to stop cryptocurrency transactions to Russia.

"Treasury will continue to make clear through new guidance that Treasury's broad actions against Russia require all U.S. persons to comply with the sanctions, regardless of whether the transactions are denominated in traditional fiat or virtual currency," the new guidance reads.

That said, countries around the world, particularly the U.S. Treasury Department, continue to closely monitor any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currencies, and have responded to their commitment to use a broad range of law enforcement agencies designed to act against violations.