Elizabeth Rosenberg, assistant secretary for terrorism financing and financial crimes at the United States Department of the Treasury, believes that sanctioning cryptocurrency mixers could help strengthen the government’s response to foreign entities seeking to illegally use digital assets.
Rosenberg said at Tuesday’s hearing of the Senate Banking Committee that addressed sanctions against Russia, that the Treasury Department’s addition of crypto mixers like Blender.io or Tornado Cash to its Specially Designated Citizens list could be an effective way to signal that the U.S. government is acting to prevent organizations from avoiding sanctions. told.
“Sanctions serve as a deterrent for any criminal trying to use a mixer to launder their funds. This is an effective way we can use to show that we cannot tolerate money laundering,” Rosenberg said.
“Privacy-enhancing technologies like jammers are indeed a concern for understanding and identifying the illegal flow of finance.”
Rosenberg also answered questions from Massachusetts Senator Elizabeth Warren, who said some in the crypto industry were outraged by the Treasury’s sanctions against mixers. Rosenberg also said that Russian oligarchs can use digital assets to evade efforts aimed at economically influencing individuals and organizations connected to the war in Ukraine. On the other hand, many people in the sector criticized the actions of the Treasury.
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Alongside mixers like Blender.io and Tornado Cash, the Treasury also targeted specific Bitcoin (BTC) addresses in September that were allegedly linked to individuals in a Russian neo-Nazi paramilitary group and an Iran-based ransomware group. As criticism and uncertainty among crypto users continued, the Treasury said that interacting with the open source code of Tornado Cash would not violate the sanctions imposed by the Office of Foreign Assets Control (OFAC).